FORM 20-F/A Brookfield Property Partners L.P. - Brookfield Asset ...

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549FORM 20-F/A(Amendment No.1)(Mark One)ÈREGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or (g) OF THE SECURITIES EXCHANGEACT OF 1934OR‘ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year endedOR‘ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF1934OR‘ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACTOF 1934Commission file number: 001-35505Brookfield Property Partners L.P.(Exact name of Registrant as specified in its charter)N/A(Translation of Registrant’s name into English)Bermuda(Jurisdiction of incorporation or organization)73 Front StreetHamilton, HM 12Bermuda(Address of principal executive office)Steven J. DouglasBrookfield Property Partners L.P.Three World Financial Center11th FloorNew York, NY 10281-1021Tel: 212-417-7000Fax: 212-417-7196(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Copy to:Mile T. KurtaTorys LLP1114 Avenue of the Americas, 23rd FloorNew York, New York 10036-7703(212) 880-6000Securities registered or to be registered pursuant to Section 12(b) of the Act.Title of each classLimited Partnership UnitsName of each exchange on which registeredNew York Stock ExchangeSecurities registered or to be registered pursuant to Section 12(g) of the Act.NoneSecurities for which there is a reporting obligation pursuant to Section 15(d) of the Act.NoneIndicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the periodcovered by the annual report.N/AIndicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes ‘No ÈIf this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant toSection 13 or 15(d) of the Securities Exchange Act of 1934.Yes ‘ No ‘Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of theSecurities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required tofile such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ‘No ÈIndicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, everyInteractive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter)during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ‘ No ‘Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):Large accelerated filer ‘ Accelerated filer ‘ Non-accelerated filer ÈIndicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in thisfiling:U.S. GAAP ‘International Financial Reporting Standards asissued by the International Accounting Standards BoardÈ Other ‘If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item theregistrant has elected to follow.Item 17 ‘ Item 18 ‘If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of theExchange Act).Yes ‘ No ‘

TABLE OF CONTENTSINTRODUCTION AND USE OF CERTAIN TERMS ......................................... 1SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS ......................... 4PART I .............................................................................. 6ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT ANDADVISERS .................................................... 61.A. DIRECTORS AND SENIOR MANAGEMENT ......................... 61.B. ADVISERS ...................................................... 61.C. AUDITORS ..................................................... 6ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE .................. 6ITEM 3. KEY INFORMATION ............................................. 63.A. SELECTED FINANCIAL DATA .................................... 63.B. CAPITALIZATION AND INDEBTEDNESS ........................... 73.C. REASONS FOR THE OFFER AND USE OF PROCEEDS ................ 73.D. RISK FACTORS ................................................. 7ITEM 4. INFORMATION ON THE COMPANY ............................... 364.A. HISTORY AND DEVELOPMENT OF THE COMPANY ................. 364.B. BUSINESS OVERVIEW ........................................... 394.C. ORGANIZATIONAL STRUCTURE ................................. 604.D. PROPERTY, PLANTS AND EQUIPMENT ............................ 65ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS ........... 655.A. OPERATING RESULTS ........................................... 655.B. LIQUIDITY AND CAPITAL RESOURCES ........................... 1125.C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC. . . . 1145.D. TREND INFORMATION .......................................... 1145.E. OFF-BALANCE SHEET ARRANGEMENTS .......................... 1155.F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS ......... 115ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES ............ 1156.A. DIRECTORS AND SENIOR MANAGEMENT ......................... 1156.B. COMPENSATION ................................................ 1176.C. BOARD PRACTICES ............................................. 1176.D. EMPLOYEES .................................................... 1216.E. SHARE OWNERSHIP ............................................. 121ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS . . . 1227.A. MAJOR SHAREHOLDERS ........................................ 1227.B. RELATED PARTY TRANSACTIONS ................................ 1237.C. INTERESTS OF EXPERTS AND COUNSEL .......................... 135ITEM 8. FINANCIAL INFORMATION ...................................... 1358.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIALINFORMATION ............................................... 1358.B. SIGNIFICANT CHANGES ......................................... 135ITEM 9. THE OFFER AND LISTING ........................................ 1359.A. OFFER AND LISTING DETAILS ................................... 1359.B. PLAN OF DISTRIBUTION ......................................... 1359.C. MARKETS ...................................................... 1359.D. SELLING SHAREHOLDERS ....................................... 1359.E. DILUTION ...................................................... 135-i-Page

TABLE OF CONTENTS(continued)Page9.F. EXPENSES OF THE ISSUE ........................................ 136ITEM 10. ADDITIONAL INFORMATION ..................................... 13610.A. SHARE CAPITAL ................................................ 13610.B. MEMORANDUM AND ARTICLES OF ASSOCIATION ................. 13610.C. MATERIAL CONTRACTS ......................................... 15910.D. EXCHANGE CONTROLS ......................................... 16010.E. TAXATION ..................................................... 16010.F. DIVIDENDS AND PAYING AGENTS ............................... 18610.G. STATEMENT BY EXPERTS ....................................... 18910.H. DOCUMENTS ON DISPLAY ....................................... 18910.I. SUBSIDIARY INFORMATION ..................................... 189ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKETRISK ........................................................... 190ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES . . . 19012.A. DEBT SECURITIES .............................................. 19012.B. WARRANTS AND RIGHTS ........................................ 19012.C. OTHER SECURITIES ............................................. 19012.D. AMERICAN DEPOSITARY SHARES ................................ 190PART II .............................................................................. 191ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES ........ 191ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITYHOLDERS AND USE OF PROCEEDS ............................... 191ITEM 15. CONTROLS AND PROCEDURES ................................... 191ITEM 16. [RESERVED] .................................................... 19116.A. AUDIT COMMITTEE FINANCIAL EXPERTS ........................ 19116.B. CODE OF ETHICS ............................................... 19116.C. PRINCIPAL ACCOUNTANT FEES AND SERVICES ................... 19116.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT16.E.COMMITTEES .................................................. 191PURCHASES OF EQUITY SECURITIES BY THE ISSUER ANDAFFILIATED PURCHASERS ....................................... 19116.F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT ........... 19116.G. CORPORATE GOVERNANCE ..................................... 19116.H MINING SAFETY DISCLOSURE ................................... 191PART III ............................................................................. 192ITEM 17. FINANCIAL STATEMENTS ....................................... 192ITEM 18. FINANCIAL STATEMENTS ....................................... 192ITEM 19. EXHIBITS ...................................................... 192SIGNATURES ........................................................................ 193INDEX TO FINANCIAL STATEMENTS .................................................. F-1UNAUDITED PRO FORMA FINANCIALSTATEMENTS OF BROOKFIELD PROPERTY PARTNERS L.P. .......................PF-1-ii-

INTRODUCTION AND USE OF CERTAIN TERMSWe have prepared this Form 20-F using a number of conventions, which you should consider whenreading the information contained herein. Unless otherwise indicated or the context otherwise requires, in thisForm 20-F:• the disclosure assumes that the spin-off has been completed;• operating and other statistical information with respect to our portfolio is presented as of March 31,2012, as if we owned our portfolio as of such date although we will not acquire the commercialproperty operations of Brookfield Asset Management until shortly before the spin-off;• all operating and other statistical information is presented as if we own 100% of each property inour portfolio, regardless of whether we own all of the interests in each property, but unlessotherwise specified excludes interests in Brookfield-sponsored real estate opportunity and financefunds and our interest in Canary Wharf Group plc, or Canary Wharf;• all financial information is presented in accordance with International Financial ReportingStandards as issued by the International Accounting Standards Board, or IFRS, other than certainnon-IFRS financial measures which are defined under “Use of Non-IFRS Measures”; and• the disclosure on Brookfield Asset Management’s ownership in our business following the spin-offdoes not reflect the nominal amount of our units that Brookfield Asset Management will withholdin connection with the satisfaction of Canadian federal and U.S. “backup” withholding taxrequirements for non-Canadian registered shareholders.In this Form 20-F, unless the context suggests otherwise, references to “we”, “us” and “our” are to ourcompany, the Property Partnership, the Holding Entities and the operating entities, each as defined below, takentogether. Unless the context suggests otherwise, in this Form 20-F references to:• an “affiliate” of any person are to any other person that, directly or indirectly through one or moreintermediaries, controls, is controlled by or is under common control with such person;• “assets under management” are to assets managed by us or by Brookfield on behalf of our thirdparty investors, as well as our own assets, and also include capital commitments that have not yetbeen drawn. Our calculation of assets under management may differ from that employed by otherasset managers and, as a result, this measure may not be comparable to similar measures presentedby other asset managers;• “Australia” are to Australia and New Zealand;• the “BPY General Partner” are to the general partner of our company, which prior to the spin-offwill be 1648285 Alberta ULC, a wholly-owned subsidiary of Brookfield Asset Management, andfollowing completion of the spin-off will be Brookfield Property Partners Limited, a wholly-ownedsubsidiary of Brookfield Asset Management;• “Brookfield” are to Brookfield Asset Management and any subsidiary of Brookfield AssetManagement, other than us;• “Brookfield Asset Management” are to Brookfield Asset Management Inc.;• “our business” are to our business of owning, operating and investing in commercial property, bothdirectly and through our operating entities;• “our company” or “our partnership” are to Brookfield Property Partners L.P., a Bermuda exemptedlimited partnership;• “commercial property” or “commercial properties” are to commercial and other real property whichgenerates or has the potential to generate income, including office, retail, multi-family andindustrial assets, but does not include, among other things, residential land development, homebuilding, construction, real estate advisory and other similar operations or services;1

• “Holding Entities” are to the direct subsidiaries of the Property Partnership, from time to time,through which it indirectly holds all of our interests in our operating entities;• “our limited partnership agreement” are to the amended and restated limited partnership agreementof our company to be entered into on or about the date of the spin-off;• the “Managers” are to the affiliates of Brookfield that provide services to us pursuant to our MasterServices Agreement, which are expected to be Brookfield Asset Management (Barbados) Inc.,BGRE Partners LP, Brookfield Developments Europe Ltd. and Brookfield Global Real Estate LLC,which are subsidiaries of Brookfield Asset Management, and unless the context otherwise requires,include any other affiliate of Brookfield that is appointed by the Managers from time to time to actas a Manager pursuant to our Master Services Agreement;• “Master Services Agreement” are to the master services agreement among the Service Recipients,the Managers, and certain other subsidiaries of Brookfield Asset Management who are partiesthereto;• “operating entities” are to the entities in which the Holding Entities hold interests and that directlyor indirectly hold our real estate assets other than entities in which the Holding Entities holdinterests for investment purposes only of less than 5% of the equity securities;• “our portfolio” are to the commercial property assets in our office, retail, multi-family andindustrial and opportunistic investment platforms, as applicable;• the “Property General Partner” are to the general partner of the Property GP LP, which prior to thespin-off will be 1648287 Alberta ULC, a wholly-owned subsidiary of Brookfield AssetManagement, and following completion of the spin-off will be Brookfield Property General PartnerLimited, a wholly-owned subsidiary of Brookfield Asset Management;• the “Property GP LP” are to Brookfield Property GP L.P., a wholly-owned subsidiary of BrookfieldAsset Management, which serves as the general partner of the Property Partnership;• the “Property Partnership” are to Brookfield Property L.P.;• the “Redemption-Exchange Mechanism” are to the mechanism by which Brookfield may requestredemption of its Redemption-Exchange Units in whole or in part in exchange for cash, subject tothe right of our company to acquire such interests (in lieu of such redemption) in exchange for unitsof our company, as more fully described in Item 10.B. “Additional Information — Memorandumand Articles of Association — Description of the Property Partnership Limited PartnershipAgreement — Redemption-Exchange Mechanism”;• the “Redemption-Exchange Units” are to the non-voting limited partnership interests in theProperty Partnership with a right of redemption or exchange pursuant to the Redemption-ExchangeMechanism;• “Service Recipients” are to our company, the Property Partnership, the Holding Entities and, at theoption of the Holding Entities, any wholly-owned subsidiary of a Holding Entity excluding anyoperating entity;• “spin-off” are to the special dividend of our units by Brookfield Asset Management as describedunder Item 4.A. “Information on the Company — History and Development of the Company —The Spin-Off”; and• “our units” and “units of our company” are to the non-voting limited partnership units in ourcompany and references to “our unitholders” and “our limited partners” are to the holders of ourunits.2

Historical Performance and Market DataThis Form 20-F contains information relating to our business as well as historical performance andmarket data for Brookfield Asset Management and certain of its operating platforms. When considering this data,you should bear in mind that historical results and market data may not be indicative of the future results that youshould expect from us.Financial InformationThe financial information contained in this Form 20-F is presented in U.S. Dollars and, unless otherwiseindicated, has been prepared in accordance with IFRS. All figures are unaudited unless otherwise indicated. Inthis Form 20-F, all references to “$” are to U.S. Dollars. Canadian Dollars, Australian Dollars, New ZealandDollars, British Pounds, Euros and Brazilian Reais are identified as “C$”, “A$”, “NZ$”, “£”, “€” and “R$”,respectively.Use of Non-IFRS MeasuresIn addition to results reported in accordance with IFRS, we use certain non-IFRS financial measures, suchas property net operating income (“NOI”), funds from operations (“FFO”) and total return (“Total Return”) toevaluate our performance and to determine the net asset values of our business. These terms do not have standardmeanings prescribed by IFRS and therefore may not be comparable to similar measures presented by othercompanies. NOI, FFO and Total Return should not be regarded as alternatives to other financial reportingmeasures prepared in accordance with IFRS and should not be considered in isolation or as substitutes formeasures prepared in accordance with IFRS.We define NOI as revenues from operations of consolidated properties less direct operating costs, whichinclude all expenses attributable to the commercial property operations, such as property maintenance, utilities,insurance, realty taxes and property administration costs, and exclude interest expense, depreciation andamortization, income taxes, fair value gains (losses) and general and administrative expenses that do not relatedirectly to operations of a commercial property. NOI is used as a key indicator of performance as it represents ameasure over which management has a certain degree of control. We evaluate the performance of our officesegment by evaluating NOI from “Existing properties”, or “same store” basis, and NOI from “Additions,dispositions and other” due to, among other things, the consolidation of the U.S. Office Fund during the period asdiscussed in Item 5.A. “Operating and Financial Review and Prospects — Operating Results — Overview of OurBusiness”. NOI from existing properties compares the performance of the property portfolio by excluding theeffect of current and prior period dispositions and acquisitions, including developments, and “one-time items ”,which for the historical periods presented consists primarily of lease termination income. NOI presented within“Additions, dispositions and other” includes the results of current and prior period acquired, developed and soldproperties, as well as the one-time items excluded from the “Existing properties” portion of NOI. We do notevaluate the performance of the operating results of the retail segment on a similar basis as the majority of ourinvestments in the retail segment are accounted for under the equity method and, as a result, are not included inNOI. Similarly, we do not evaluate the operating results of our other segments on a same store basis based on thenature of the investments as the variances between same store and total NOI are not material. For a reconciliationof NOI to IFRS measures, see Item 5.A. “Operating and Financial Review and Prospects — Operating Results —Reconciliation of Performance Measures to IFRS Measures”.Our definition of FFO includes all of the adjustments that are outlined in the National Association of RealEstate Investment Trusts, or NAREIT, definition of funds from operations, including the exclusion of gains (orlosses) from the sale of real estate property, the add back of any depreciation and amortization related to realestate assets and the adjustment for unconsolidated partnerships and joint ventures. In addition to the adjustmentsprescribed by NAREIT, we also exclude any unrealized fair value gains (or losses) that arise as a result of3

eporting under IFRS, certain other non cash items, if any, and income taxes that arise as certain of oursubsidiaries are structured as corporations as opposed to real estate investment trusts, or REITs. Because FFOexcludes fair value gains (losses) (including equity accounted fair value gains (losses)), realized gains (losses)and income tax expense (benefits), it provides a performance measure that, when compared year over year,reflects the impact to operations from trends in occupancy rates, rental rates, operating costs and interest costs,providing perspective not immediately apparent from net income. For a reconciliation of FFO to net income, seeItem 5.A. “Operating and Financial Review and Prospects — Reconciliation of Performance Measures to IFRSMeasures”. We reconcile FFO to net income attributable to Brookfield rather than cash flow from operatingactivities as we believe net income is the most comparable measure.We define Total Return as income before income tax expense (benefit) and the related non-controllinginterests. Total Return is used as a key indicator of performance as we believe that our performance is bestassessed by considering FFO plus the increase or decrease in the value of our assets over a period of timebecause that is the basis on which we make investment decisions and operate our business. For reconciliations ofNOI, FFO and Total Return to IFRS measures, see Item 5.A. “Operating and Financial Review and Prospects —Operating Results — Reconciliation of Performance Measures to IFRS Measures”.We urge you to review the IFRS financial measures in this Form 20-F, including the financial statements,the notes thereto, our pro forma financial statements and the other financial information contained herein, and notto rely on any single financial measure to evaluate our company.SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTSThis Form 20-F contains certain forward-looking statements. Forward-looking statements relate toexpectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressionsconcerning matters that are not historical facts. Forward-looking statements in this Form 20-F include statementsregarding the anticipated benefits of the spin-off, the quality of our assets, our anticipated financial performance,our company’s future growth prospects, our ability to make distributions and the amount of such distributions,the listing and liquidity of our units and our company’s access to capital. In some cases, you can identifyforward-looking statements by terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”,“may”, “plan”, “potential”, “should”, “will” and “would” or the negative of those terms or other comparableterminology.The forward-looking statements are based on our beliefs, assumptions and expectations of our futureperformance, taking into account all information currently available to us. These beliefs, assumptions andexpectations can change as a result of many possible events or factors, not all of which are known to us or withinour control. If a change occurs, our business, financial condition, liquidity and results of operations may varymaterially from those expressed in our forward-looking statements. The following factors, among others, couldcause our actual results to vary from our forward-looking statements:• changes in the general economy;• the cyclical nature of the real estate industry;• actions of competitors;• failure to attract new tenants and enter into renewal or new leases with tenants on favorable terms;• our ability to derive fully anticipated benefits from future or existing acquisitions, joint ventures,investments or dispositions;• actions or potential actions that could be taken by our co-venturers, partners, fund investors orco-tenants;• the bankruptcy, insolvency, credit deterioration or other default of our tenants;• actions or potential actions that could be taken by Brookfield;4

• the departure of some or all of Brookfield’s key professionals;• the threat of litigation;• changes to legislation and regulations;• possible environmental liabilities and other possible liabilities;• our ability to obtain adequate insurance at commercially reasonable rates;• our financial condition and liquidity;• downgrading of credit ratings and adverse conditions in the credit markets;• changes in financial markets, foreign currency exchange rates, interest rates or political conditions;• the general volatility of the capital markets and the market price of our units; and• other factors described in this Form 20-F, including those set forth under Item 3.D. “KeyInformation — Risk Factors”, Item 5. “Operating and Financial Review and Prospects” andItem 4.B. “Information on the Company — Business Overview”.Except as required by applicable law, we undertake no obligation to update or revise publicly any forwardlookingstatements, whether as a result of new information, future events or otherwise. We qualify any and all ofour forward-looking statements by these cautionary factors. Please keep this cautionary note in mind as you readthis Form 20-F.5

PART IITEM 1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS1.A. DIRECTORS AND SENIOR MANAGEMENTFor information regarding our directors and senior management, see Item 6.A. “Directors, SeniorManagement and Employees — Directors and Senior Management”.1.B. ADVISERSOur U.S. and Canadian legal counsel is Torys LLP, 1114 Avenue of the Americas, 23 rd Floor, New York,New York 10036. Our Bermuda legal counsel is Appleby, Canon’s Court, 22 Victoria Street, PO Box HM 1179,Hamilton, Bermuda.1.C. AUDITORSThe BPY General Partner has retained Deloitte & Touche LLP to act as our company’s independentregistered chartered accountants. The address for Deloitte & Touche LLP is Brookfield Place, 181 Bay Street,Suite 1400, Toronto, Ontario, M5J 2V1.ITEM 2.OFFER STATISTICS AND EXPECTED TIMETABLENot applicable.ITEM 3.KEY INFORMATION3.A. SELECTED FINANCIAL DATAThe following tables present selected financial data for Brookfield’s commercial property operations thatwill be contributed to us prior to the spin-off. The information in this section is derived from, and should be readin conjunction with, the carve-out financial statements of Brookfield’s commercial property operations as atMarch 31, 2012, and for the three months ended March 31, 2012 and 2011, and the notes thereto, and as atDecember 31, 2011 and 2010, and for the years ended December 31, 2011, 2010 and 2009, and the notes thereto,each of which is included elsewhere in this Form 20-F. The information in this section should also be read inconjunction with our unaudited pro forma financial statements (“Unaudited Pro Forma Financial Statements”) asat March 31, 2012 and for the three months ended March 31, 2012 and for the year ended December 31, 2011,included elsewhere in this Form 20-F.(US$ Millions) Three months ended March 31, 2012 2011Total revenue $ 775 $ 603Net income 710 532Net income attributable to parent company 383 337FFO (1) 141 136(US$ Millions) Years ended December 31, 2011 2010 2009Total revenue $ 2,820 $ 2,270 $ 1,999Net income (loss) 3,745 2,109 (734)Net income (loss) attributable to parent company 2,323 1,026 (477)FFO (1) 576 426 3916

(US$ Millions) Mar. 31, 2012 Dec. 31, 2011 Dec. 31, 2010Investment properties $ 28,138 $ 27,594 $ 20,960Equity accounted investments 7,466 6,888 4,402Total assets 41,049 40,317 30,567Property debt 15,266 15,387 11,964Total equity 22,599 21,494 15,144Equity in net assets attributable to parent company 12,575 11,881 7,464(1) FFO is a non-IFRS financial measure. See Item 5.A. “Operations and Financial Review and Prospects – Reconciliation of PerformanceMeasures to IFRS Measures”.3.B. CAPITALIZATION AND INDEBTEDNESSThe following table sets forth our company’s pro forma capitalization and indebtedness as at the datesindicated below on an actual basis and as adjusted to give effect to the spin-off as well as the other transactionsreferred to in the Unaudited Pro Forma Financial Statements included elsewhere in this Form 20-F, as thoughthey had occurred on March 31, 2012.This information should be read in conjunction with Item 5.A. “Operating and Financial Review andProspects — Operating Results” and Item 5.B. “Operating and Financial Review and Prospects — Liquidity andCapital Resources” and the Unaudited Pro Forma Financial Statements included elsewhere in this Form 20-F.As at March 31, 2012(US$ Millions) Actual (1) Pro FormaTotal Assets – $ 40,297DebtProperty debt – 14,627Capital securities – 1,612Total Debt – 16,239Other liabilities – 2,421Total Liabilities – 18,660EquityPartnership equity – 11,615Non-controlling interests – 10,022Total Equity – 21,637Debt to total capitalization (total debt / total assets) – 40%(1) Balance sheet of our company as at May 31, 2012, which includes partnership equity of $0.001 million which is not presented due torounding.3.C. REASONS FOR THE OFFER AND USE OF PROCEEDSNot applicable.3.D. RISK FACTORSYour holding of units of our company will involve substantial risks. You should carefully consider thefollowing factors in addition to the other information set forth in this Form 20-F. If any of the following risksactually occur, our business, financial condition and results of operations and the value of your units wouldlikely suffer.7

Risks Relating to Us and Our CompanyOur company is a newly formed partnership with no separate operating history and the historical and proforma financial information included herein does not reflect the financial condition or operating results wewould have achieved during the periods presented, and therefore may not be a reliable indicator of our futurefinancial performance.Our company was formed on January 3, 2012 and has only recently commenced its activities and has notgenerated any significant net income to date. Our lack of operating history will make it difficult to assess ourability to operate profitably and make distributions to unitholders. Although some of our assets and operationshave been under Brookfield’s control prior to the formation of our company, their combined results have notpreviously been reported on a stand-alone basis and the historical and pro forma financial statements included inthis Form 20-F may not be indicative of our future financial condition or operating results. We urge you tocarefully consider the basis on which the historical and pro forma financial information included herein wasprepared and presented.Our company relies on the Property Partnership and, indirectly, the Holding Entities and our operatingentities to provide us with the funds necessary to pay distributions and meet our financial obligations.Our company’s sole direct investment is its limited partnership interest in the Property Partnership, whichowns all of the common shares or equity interests, as applicable, of the Holding Entities, through which we holdall of our interests in the operating entities. Our company has no independent means of generating revenue. As aresult, we depend on distributions and other payments from the Property Partnership and, indirectly, the HoldingEntities and our operating entities to provide us with the funds necessary to pay distributions on our units and tomeet our financial obligations. The Property Partnership, the Holding Entities and our operating entities arelegally distinct from our company and they will generally be required to service their debt obligations beforemaking distributions to us or their parent entity, as applicable, thereby reducing the amount of our cash flowavailable to pay distributions on our units, fund working capital and satisfy other needs. Any other entitiesthrough which we may conduct operations in the future will also be legally distinct from our company and maybe restricted in their ability to pay dividends and distributions or otherwise make funds available to our companyunder certain conditions.We anticipate that the only distributions our company will receive in respect of our limited partnershipinterests in the Property Partnership will consist of amounts that are intended to assist our company in makingdistributions to our unitholders in accordance with our company’s distribution policy and to allow our companyto pay expenses as they become due.We are subject to foreign currency risk and our risk management activities may adversely affect theperformance of our operations.Some of our assets and operations are in countries where the U.S. Dollar is not the functional currency.These operations pay distributions in currencies other than the U.S. Dollar which we must convert to U.S. Dollarsprior to making distributions on our units. A significant depreciation in the value of such foreign currencies mayhave a material adverse effect on our business, financial condition and results of operations.When managing our exposure to such market risks, we may use forward contracts, options, swaps, caps,collars and floors or pursue other strategies or use other forms of derivative instruments. The success of anyhedging or other derivative transactions that we enter into generally will depend on our ability to structurecontracts that appropriately offset our risk position. As a result, while we may enter into such transactions inorder to reduce our exposure to market risks, unanticipated market changes may result in poorer overallinvestment performance than if the transaction had not been executed. Such transactions may also limit theopportunity for gain if the value of a hedged position increases.8

Our company is not, and does not intend to become, regulated as an investment company under the U.S.Investment Company Act of 1940 (and similar legislation in other jurisdictions) and if our company weredeemed an “investment company” under the U.S. Investment Company Act of 1940, applicable restrictionswould make it impractical for us to operate as contemplated.The U.S. Investment Company Act of 1940 and the rules thereunder (and similar legislation in otherjurisdictions) provide certain protections to investors and impose certain restrictions on companies that areregistered as investment companies. Among other things, such rules limit or prohibit transactions with affiliates,impose limitations on the issuance of debt and equity securities and impose certain governance requirements. Ourcompany has not been and does not intend to become regulated as an investment company and our companyintends to conduct its activities so it will not be deemed to be an investment company under the U.S. InvestmentCompany Act of 1940 (and similar legislation in other jurisdictions). In order to ensure that our company is notdeemed to be an investment company, we may be required to materially restrict or limit the scope of ouroperations or plans, we will be limited in the types of acquisitions that we may make and we may need to modifyour organizational structure or dispose of assets that we would not otherwise dispose of. Moreover, if anythingwere to happen which would potentially cause our company to be deemed an investment company under the U.S.Investment Company Act of 1940, it would be impractical for us to operate as intended, agreements andarrangements between and among us and Brookfield would be impaired and our business, financial condition andresults of operations would be materially adversely affected. Accordingly, we would be required to takeextraordinary steps to address the situation, such as the amendment or termination of our Master ServicesAgreement, the restructuring of our company and the Holding Entities, the amendment of our limited partnershipagreement or the termination of our company, any of which would materially adversely affect the value of ourunits. In addition, if our company were deemed to be an investment company under the U.S. InvestmentCompany Act of 1940, it would be taxable as a corporation for U.S. federal income tax purposes, and suchtreatment would materially adversely affect the value of our units. See Item 10.E. “Additional Information —Taxation — U.S. Tax Considerations — Partnership Status of Our Company and the Property Partnership”.Our company is a “foreign private issuer” under U.S. securities laws and as a result is subject to disclosureobligations different from requirements applicable to U.S. domestic registrants listed on the New York StockExchange, or NYSE.Although our company is subject to the periodic reporting requirement of the U.S. Securities ExchangeAct, as amended, or the Exchange Act, the periodic disclosure required of foreign private issuers under theExchange Act is different from periodic disclosure required of U.S. domestic registrants. Therefore, there may beless publicly available information about us than is regularly published by or about other public companies in theUnited States and our company is exempt from certain other sections of the Exchange Act that U.S. domesticregistrants would otherwise be subject to, including the requirement to provide our unitholders with informationstatements or proxy statements that comply with the Exchange Act. In addition, insiders and large unitholders ofour company will not be obligated to file reports under Section 16 of the Exchange Act and certain of thegovernance rules imposed by the NYSE will be inapplicable to our company.Our company is expected to be an “SEC foreign issuer” under Canadian securities regulations and exemptfrom certain requirements of Canadian securities laws.Although our company will become a reporting issuer in Canada, we expect it will be an “SEC foreignissuer” and exempt from certain Canadian securities laws relating to continuous disclosure obligations and proxysolicitation if our company complies with certain reporting requirements applicable in the United States,provided that the relevant documents filed with the U.S. Securities and Exchange Commission, or the SEC, arefiled in Canada and sent to our company’s unitholders in Canada to the extent and in the manner and within thetime required by applicable U.S. requirements. Therefore, there may be less publicly available information inCanada about us than is regularly published by or about other reporting issuers in Canada.9

Risks Relating to Our BusinessOur economic performance and the value of our assets are subject to the risks incidental to the ownership andoperation of real estate assets.Our economic performance, the value of our assets and, therefore, the value of our units are subject to therisks normally associated with the ownership and operation of real estate assets, including but not limited to:• downturns and trends in the national, regional and local economic conditions where our propertiesand other assets are located;• the cyclical nature of the real estate industry;• local real estate market conditions, such as an oversupply of commercial properties, includingspace available by sublease, or a reduction in demand for such properties;• changes in interest rates and the availability of financing;• competition from other properties;• changes in market rental rates and our ability to rent space on favorable terms;• the bankruptcy, insolvency, credit deterioration or other default of our tenants;• the need to periodically renovate, repair and re-lease space and the costs thereof;• increases in maintenance, insurance and operating costs;• civil disturbances, earthquakes and other natural disasters, or terrorist acts or acts of war which mayresult in uninsured or underinsured losses;• the decrease in the attractiveness of our properties to tenants;• the decrease in the underlying value of our properties; and• certain significant expenditures, including property taxes, maintenance costs, mortgage payments,insurance costs and related charges that must be made regardless of whether a property is producingsufficient income to service these expenses.We are dependent upon the economic conditions of the markets where our assets are located.We are affected by local, regional, national and international economic conditions and other events andoccurrences that affect the markets in which we own assets. A protracted decline in economic conditions willcause downward pressure on our operating margins and asset values as a result of lower demand for space.Substantially all of our properties are located in North America, Europe, Australia and Brazil. Aprolonged downturn in one or more of these economies or the economy of any other country where we ownproperty would result in reduced demand for space and number of prospective tenants and will affect the abilityof our properties to generate significant revenue. If there is an increase in operating costs resulting from inflationand other factors, we may not be able to offset such increases by increasing rents.10

Additionally, as part of our strategy for our office property platform is to focus on markets underpinnedby major financial, energy and professional services businesses, a significant downturn in one or more of theindustries in which these businesses operate would also adversely affect our results of operations.We face risks associated with the use of debt to finance our business, including refinancing risk.We incur debt in the ordinary course of our business and therefore are subject to the risks associated withdebt financing. These risks, including the following, may adversely affect our financial condition and results ofoperations:• cash flows may be insufficient to meet required payments of principal and interest;• payments of principal and interest on borrowings may leave insufficient cash resources to payoperating expenses;• we may not be able to refinance indebtedness on our properties at maturity due to business andmarket factors, including: disruptions in the capital and credit markets; the estimated cash flows ofour properties and other assets; the value of our properties and other assets; and financial,competitive, business and other factors, including factors beyond our control; and• if refinanced, the terms of a refinancing may not be as favorable as the original terms of the relatedindebtedness.Our operating entities have a significant degree of leverage on their assets. Highly leveraged assets areinherently more sensitive to declines in revenues, increases in expenses and interest rates, and adverse marketconditions. A leveraged company’s income and net assets also tend to increase or decrease at a greater rate thanwould otherwise be the case if money had not been borrowed. As a result, the risk of loss associated with aleveraged company, all other things being equal, is generally greater than for companies with comparatively lessdebt.We rely on our operating entities to provide our company with the funds necessary to make distributionson our units and meet our financial obligations. The leverage on our assets may affect the funds available to ourcompany if the terms of the debt impose restrictions on the ability of our operating entities to make distributionsto our company. In addition, our operating entities will generally have to service their debt obligations beforemaking distributions to our company or their parent entity.Leverage may also result in a requirement for liquidity, which may force the sale of assets at times of lowdemand and/or prices for such assets.We may also incur indebtedness under future credit facilities, such as the revolving credit facility weexpect to obtain from Brookfield, or other debt-like instruments, in addition to any asset-level indebtedness. Wemay also issue debt or debt-like instruments in the market in the future, which may or may not be rated. Shouldsuch debt or debt-like instruments be rated, a credit downgrade will have an adverse impact on the cost of suchdebt.If we are unable to refinance our indebtedness on acceptable terms, or at all, we may need to dispose ofone or more of our properties or other assets upon disadvantageous terms. In addition, prevailing interest rates orother factors at the time of refinancing could increase our interest expense, and if we mortgage property to securepayment of indebtedness and are unable to make mortgage payments, the mortgagee could foreclose upon suchproperty or appoint a receiver to receive an assignment of our rents and leases. This may adversely affect ourability to make distributions or payments to our unitholders and lenders.11

Restrictive covenants in our indebtedness may limit management’s discretion with respect to certain businessmatters.Instruments governing any of our indebtedness or indebtedness of our operating entities or theirsubsidiaries may contain restrictive covenants limiting our discretion with respect to certain business matters.These covenants could place significant restrictions on, among other things, our ability to create liens or otherencumbrances, to make distributions to our unitholders or make certain other payments, investments, loans andguarantees and to sell or otherwise dispose of assets and merge or consolidate with another entity. Thesecovenants could also require us to meet certain financial ratios and financial condition tests. A failure to complywith any such covenants could result in a default which, if not cured or waived, could permit acceleration of therelevant indebtedness.If we are unable to manage our interest rate risk effectively, our cash flows and operating results may suffer.Advances under credit facilities and certain property-level mortgage debt bear interest at a variable rate.We may incur further indebtedness in the future that also bears interest at a variable rate or we may be requiredto refinance our debt at higher rates. In addition, though we attempt to manage interest rate risk, there can be noassurance that we will hedge such exposure effectively or at all in the future. Accordingly, increases in interestrates above that which we anticipate based upon historical trends would adversely affect our cash flows.We face potential adverse effects from tenant defaults, bankruptcies or insolvencies.A commercial tenant may experience a downturn in its business, which could cause the loss of that tenantor weaken its financial condition and result in the tenant’s inability to make rental payments when due or, forretail tenants, a reduction in percentage rent payable. If a tenant defaults, we may experience delays and incurcosts in enforcing our rights as landlord and protecting our investments.We cannot evict a tenant solely because of its bankruptcy. In addition, in certain jurisdictions where weown properties, a court may authorize a tenant to reject and terminate its lease. In such a case, our claim againstthe tenant for unpaid, future rent would be subject to a statutory cap that might be substantially less than theremaining rent owed under the lease. In any event, it is unlikely that a bankrupt or insolvent tenant will pay thefull amount it owes under a lease. The loss of rental payments from tenants and costs of re-leasing wouldadversely affect our cash flows and results of operations. In the case of our retail properties, the bankruptcy orinsolvency of an anchor tenant or tenant with stores at many of our properties would cause us to suffer lowerrevenues and operational difficulties, including difficulties leasing the remainder of the property. Significantexpenses associated with each property, such as mortgage payments, real estate taxes and maintenance costs, aregenerally not reduced when circumstances cause a reduction in income from the property. In the event of asignificant number of lease defaults and/or tenant bankruptcies, our cash flows may not be sufficient to pay cashdistributions to our unitholders and repay maturing debt or other obligations.Reliance on significant tenants could adversely affect our results of operations.Many of our properties are occupied by one or more significant tenants and, therefore, our revenues fromthose properties will be materially dependent on the creditworthiness and financial stability of those tenants. Ourbusiness would be adversely affected if any of those tenants failed to renew certain of their significant leases,became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely fashion or at all. In the eventof a default by one or more significant tenants, we may experience delays in enforcing our rights as landlord andmay incur substantial costs in protecting our investment and re-leasing the property. If a lease of a significanttenant is terminated, it may be difficult, costly and time consuming to attract new tenants and lease the propertyfor the rent previously received.12

Our inability to enter into renewal or new leases with tenants on favorable terms or at all for all or asubstantial portion of space that is subject to expiring leases would adversely affect our cash flows andoperating results.Our properties generate revenue through rental payments made by tenants of the properties. Upon theexpiry of any lease, there can be no assurance that the lease will be renewed or the tenant replaced. The terms ofany renewal or replacement lease may be less favorable to us than the existing lease. We would be adverselyaffected, in particular, if any major tenant ceases to be a tenant and cannot be replaced on similar or better termsor at all. Additionally, we may not be able to lease our properties to an appropriate mix of tenants. Retail tenantsmay negotiate leases containing exclusive rights to sell particular types of merchandise or services within aparticular retail property. When leasing other space after the vacancy of a retail tenant, these provisions may limitthe number and types of prospective tenants for the vacant space.Our competitors may adversely affect our ability to lease our properties which may cause our cash flows andoperating results to suffer.Each segment of the real estate industry is competitive. Numerous other developers, managers andowners of commercial properties compete with us in seeking tenants and, in the case of our multi-familyproperties, there are numerous housing alternatives which compete with our properties in attracting residents.Some of the properties of our competitors may be newer, better located or better capitalized. These competingproperties may have vacancy rates higher than our properties, which may result in their owners being willing tomake space available at lower prices than the space in our properties, particularly if there is an oversupply ofspace available in the market. Competition for tenants could have an adverse effect on our ability to lease ourproperties and on the rents that we may charge or concessions that we must grant. If our competitors adverselyimpact our ability to lease our properties, our cash flows and operating results may suffer.Our ability to realize our strategies and capitalize on our competitive strengths are dependent on theability of our operating entities to effectively operate our large group of commercial properties, maintain goodrelationships with tenants, and remain well-capitalized, and our failure to do any of the foregoing would affectour ability to compete effectively in the markets in which we do business.Our insurance may not cover some potential losses or may not be obtainable at commercially reasonable rates,which could adversely affect our financial condition and results of operations.We maintain insurance on our properties in amounts and with deductibles that we believe are in line withwhat owners of similar properties carry; however, our insurance may not cover some potential losses or may notbe obtainable at commercially reasonable rates in the future.There also are certain types of risks (such as war, environmental contamination such as toxic mold, andlease and other contract claims) which are either uninsurable or not economically insurable. Should anyuninsured or underinsured loss occur, we could lose our investment in, and anticipated profits and cash flowsfrom, one or more properties, and we would continue to be obligated to repay any recourse mortgageindebtedness on such properties.Possible terrorist activity could adversely affect our financial condition and results of operations and ourinsurance may not cover some losses due to terrorism or may not be obtainable at commercially reasonablerates.Possible terrorist attacks in the markets where our properties are located may result in declining economicactivity, which could reduce the demand for space at our properties, reduce the value of our properties and couldharm the demand for goods and services offered by our tenants.Additionally, terrorist activities could directly affect the value of our properties through damage,destruction or loss. Our office portfolio is concentrated in large metropolitan areas, some of which have been or13

may be perceived to be subject to terrorist attacks. Many of our office properties consist of high-rise buildings,which may also be subject to this actual or perceived threat. Our insurance may not cover some losses due toterrorism or may not be obtainable at commercially reasonable rates.We are subject to risks relating to development and redevelopment projects.On a strategic and selective basis, we may develop and redevelop properties. The real estate developmentand redevelopment business involves significant risks that could adversely affect our business, financialcondition and results of operations, including the following:• we may not be able to complete construction on schedule or within budget, resulting in increaseddebt service expense and construction costs and delays in leasing the properties;• we may not have sufficient capital to proceed with planned redevelopment or expansion activities;• we may abandon redevelopment or expansion activities already under way, which may result inadditional cost recognition;• we may not be able to obtain, or may experience delays in obtaining, all necessary zoning, landuse,building, occupancy and other governmental permits and authorizations;• we may not be able to lease properties at all or on favorable terms, or occupancy rates and rents at acompleted project might not meet projections and, therefore, the project might not be profitable;• construction costs, total investment amounts and our share of remaining funding may exceed ourestimates and projects may not be completed and delivered as planned; and• upon completion of construction, we may not be able to obtain, or obtain on advantageous terms,permanent financing for activities that we have financed through construction loans.We are subject to risks that affect the retail environment.We are subject to risks that affect the retail environment, including unemployment, weak income growth,lack of available consumer credit, industry slowdowns and plant closures, low consumer confidence, increasedconsumer debt, poor housing market conditions, adverse weather conditions, natural disasters and the need to paydown existing obligations. All of these factors could negatively affect consumer spending and adversely affectthe sales of our retail tenants. This could have an unfavorable effect on our operations and our ability to attractnew retail tenants.In addition, our retail tenants face competition from retailers at other regional malls, outlet malls andother discount shopping centers, discount shopping clubs, catalogue companies, and through internet sales andtelemarketing. Competition of these types could reduce the percentage rent payable by certain retail tenants andadversely affect our revenues and cash flows. Additionally, our retail tenants are dependent on perceptions byretailers and shoppers of the safety, convenience and attractiveness of our retail properties. If retailers andshoppers perceive competing properties and other retailing options such as the internet to be more convenient orof a higher quality, our revenues may be adversely affected.Some of our retail lease agreements include a co-tenancy provision which allows the mall tenant to pay areduced rent amount and, in certain instances, terminate the lease, if we fail to maintain certain occupancy levelsat the mall. In addition, certain of our tenants have the ability to terminate their leases prior to the leaseexpiration date if their sales do not meet agreed upon thresholds. Therefore, if occupancy, tenancy or sales fallbelow certain thresholds, rents we are entitled to receive from our retail tenants would be reduced and our abilityto attract new tenants may be limited.14

The computation of cost reimbursements from our retail tenants for common area maintenance, insuranceand real estate taxes is complex and involves numerous judgments including interpretation of lease terms andother tenant lease provisions. Most tenants make monthly fixed payments of common area maintenance,insurance, real estate taxes and other cost reimbursements and, after the end of the calendar year, we computeeach tenant’s final cost reimbursements and issue a bill or credit for the full amount, after considering amountspaid by the tenant during the year. The billed amounts could be disputed by the tenant or become the subject of atenant audit or even litigation. There can be no assurance that we will collect all or any portion of these amounts.We are subject to risks associated with the multi-family residential industry.We are subject to risks associated with the multi-family residential industry, including the level ofmortgage interest rates which may encourage tenants to purchase rather than lease and housing and governmentalprograms that provide assistance and rent subsidies to tenants. If the demand for multi-family properties isreduced, income generated from our multi-family residential properties and the underlying value of suchproperties may be adversely affected.In addition, certain jurisdictions regulate the relationship of an owner and its residential tenants.Commonly, these laws require a written lease, good cause for eviction, disclosure of fees, and notification toresidents of changed land use, while prohibiting unreasonable rules, retaliatory evictions, and restrictions on aresident’s choice of landlords. Apartment building owners have been the subject of lawsuits under various“Landlord and Tenant Acts” and other general consumer protection statutes for coercive, abusive orunconscionable leasing and sales practices. If we become subject to litigation, the outcome of any suchproceedings may materially adversely affect us and may continue for long periods of time. A few jurisdictionsmay offer more significant protection to residential tenants. In addition to state or provincial regulation of thelandlord-tenant relationship, numerous towns and municipalities impose rent control on apartment buildings. Theimposition of rent control on our multi-family residential units could have a materially adverse effect on ourresults of operations.If we are unable to recover from a business disruption on a timely basis our financial condition and results ofoperations could be adversely affected.Our business is vulnerable to damages from any number of sources, including computer viruses,unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Anysystem failure or accident that causes interruptions in our operations could result in a material disruption to ourbusiness. If we are unable to recover from a business disruption on a timely basis, our financial condition andresults of operations would be adversely affected. We may also incur additional costs to remedy damages causedby such disruptions.Because certain of our assets are illiquid, we may not be able to sell these assets when appropriate or whendesired.Large commercial properties like the ones that we own can be hard to sell, especially if local marketconditions are poor. Such illiquidity could limit our ability to diversify our assets promptly in response tochanging economic or investment conditions.Additionally, financial difficulties of other property owners resulting in distressed sales could depress realestate values in the markets in which we operate in times of illiquidity. These restrictions reduce our ability torespond to changes in the performance of our assets and could adversely affect our financial condition and resultsof operations.We face risks associated with property acquisitions.Competition from other well-capitalized real estate investors, including both publicly-traded real estateinvestment trusts and institutional investment funds, may significantly increase the purchase price of, or prevent15

us from acquiring, a desired property. Acquisition agreements will typically contain conditions to closing,including completion of due diligence to our satisfaction or other conditions that are not within our control,which may not be satisfied. Acquired properties may be located in new markets where we may have limitedknowledge and understanding of the local economy, an absence of business relationships in the area orunfamiliarity with local government and applicable laws and regulations. We may be unable to financeacquisitions on favorable terms or newly acquired properties may fail to perform as expected. We mayunderestimate the costs necessary to bring an acquired property up to standards established for its intendedmarket position or we may be unable to quickly and efficiently integrate new acquisitions into our existingoperations. We may also acquire properties subject to liabilities and without any recourse, or with only limitedrecourse, with respect to unknown liabilities. Each of these factors could have an adverse effect on our results ofoperations and financial condition.We do not control certain of our operating entities, including General Growth Properties, Inc., or GGP andCanary Wharf, and therefore we may not be able to realize some or all of the benefits that we expect to realizefrom those entities.We do not have control of certain of our operating entities, including GGP and Canary Wharf. Ourinterests in those entities subject us to the operating and financial risks of their businesses, the risk that therelevant company may make business, financial or management decisions that we do not agree with, and the riskthat we may have differing objectives than the entities in which we have interests. Because we do not have theability to exercise control over those entities, we may not be able to realize some or all of the benefits that weexpect to realize from those entities. For example, we may not be able to cause such operating entities to makedistributions to us in the amount or at the time that we need or want such distributions. In addition, we rely on theinternal controls and financial reporting controls of the public companies in which we invest and the failure ofsuch companies to maintain effective controls or comply with applicable standards may adversely affect us.We do not have sole control over the properties that we own with co-venturers, partners, fund investors orco-tenants or over the revenues and certain decisions associated with those properties, which may limit ourflexibility with respect to these investments.We participate in joint ventures, partnerships, funds and co-tenancies affecting many of our properties.Such investments involve risks not present were a third party not involved, including the possibility that ourco-venturers, partners, fund investors or co-tenants might become bankrupt or otherwise fail to fund their shareof required capital contributions. The bankruptcy of one of our co-venturers, partners, fund investors orco-tenants could materially and adversely affect the relevant property or properties. Pursuant to bankruptcy laws,we could be precluded from taking some actions affecting the estate of the other investor without prior courtapproval which would, in most cases, entail prior notice to other parties and a hearing. At a minimum, therequirement to obtain court approval may delay the actions we would or might want to take. If the relevant jointventure or other investment entity has incurred recourse obligations, the discharge in bankruptcy of one of theother investors might result in our ultimate liability for a greater portion of those obligations than wouldotherwise be required.Additionally, our co-venturers, partners, fund investors or co-tenants might at any time have economic orother business interests or goals which are inconsistent with those of our company, and we could becomeengaged in a dispute with any of them that might affect our ability to develop or operate a property. In addition,we do not have sole control of certain major decisions relating to these properties, including decisions relating to:the sale of the properties; refinancing; timing and amount of distributions of cash from such properties; andcapital improvements.In some instances where we are the property manager for a joint venture, the joint venture retains jointapproval rights over various material matters such as the budget for the property, specific leases and our leasingplan. Moreover, in certain property management arrangements the other venturer can terminate the property16

management agreement in limited circumstances relating to enforcement of the property managers’ obligations.In addition, the sale or transfer of interests in some of our joint ventures and partnerships is subject to rights offirst refusal or first offer and some joint venture and partnership agreements provide for buy-sell or similararrangements. Such rights may be triggered at a time when we may not want to sell but we may be forced to doso because we may not have the financial resources at that time to purchase the other party’s interest. Such rightsmay also inhibit our ability to sell an interest in a property or a joint venture or partnership within our desiredtime frame or on any other desired basis.We are subject to risks associated with commercial property loans.We have interests in loans or participations in loans, or securities whose underlying performance depends onloans made with respect to a variety of commercial real estate. Such interests are subject to normal credit risks aswell as those generally not associated with traditional debt securities. The ability of the borrowers to repay theloans will typically depend upon the successful operation of the related real estate project and the availability offinancing. Any factors which affect the ability of the project to generate sufficient cash flow could have amaterial effect on the value of these interests. Such factors include, but are not limited to: the uncertainty of cashflow to meet fixed obligations; adverse changes in general and local economic conditions, including interest ratesand local market conditions; tenant credit risks; the unavailability of financing, which may make the operation,sale, or refinancing of a property difficult or unattractive; vacancy and occupancy rates; construction andoperating costs; regulatory requirements, including zoning, rent control and real and personal property tax laws,rates and assessments; environmental concerns; project and borrower diversification; and uninsured losses.Security underlying such interests will generally be in a junior or subordinate position to senior financing. Incertain circumstances, in order to protect our interest, we may decide to repay all or a portion of the seniorindebtedness relating to the particular interests or to cure defaults with respect to such senior indebtedness.We invest in mezzanine debt, which can rank below other senior lenders.We invest in mezzanine debt interests in real estate companies and properties whose capital structureshave significant debt ranking ahead of our investments. Our investments will not always benefit from the same orsimilar financial and other covenants as those enjoyed by the debt ranking ahead of our investments or benefitfrom cross-default provisions. Moreover, it is likely that we will be restricted in the exercise of our rights inrespect of our investments by the terms of subordination agreements with the debt ranking ahead of themezzanine capital. Accordingly, we may not be able to take the steps necessary to protect our investments in atimely manner or at all and there can be no assurance that the rate of return objectives of any particularinvestment will be achieved. To protect our original investment and to gain greater control over the underlyingassets, we may elect to purchase the interest of a senior creditor or take an equity interest in the underlying assets,which may require additional investment requiring us to expend additional capital.We are subject to risks related to syndicating or selling participations in our interests.The strategy of the finance funds in which we have interests depends, in part, upon syndicating or sellingparticipations in senior interests, either through capital markets collateralized debt obligation transactions orotherwise. If the finance funds cannot do so on terms that are favorable to us, we may not make the returns weanticipate.We face risks relating to the legal aspects of mortgage loans and may be subject to liability as a lender.Certain interests acquired by us will be subject to risks relating to the legal aspects of mortgage loans.Depending upon the applicable law governing mortgage loans (which laws may differ substantially), we may beadversely affected by the operation of law (including state or provincial law) with respect to our ability toforeclose mortgage loans, the borrower’s right of redemption, the enforceability of assignments of rents, due onsale and acceleration clauses in loan instruments, as well as other creditors’ rights provided in such documents.In addition, we may be subject to liability as a lender with respect to our negotiation, administration, collection17

and/or foreclosure of mortgage loans. As a lender, we may also be subject to penalties for violation of usurylimitations, which penalties may be triggered by contracting for, charging or receiving usurious interest.Bankruptcy laws may delay our ability to realize on our collateral or may adversely affect the priority thereofthrough doctrines such as equitable subordination or may result in a restructuring of the debt through principlessuch as the “cramdown” provisions of applicable bankruptcy laws.We have significant interests in public companies, and changes in the market prices of the stock of suchpublic companies, particularly during times of increased market volatility, could have a negative impact onour financial condition and results of operations.We hold significant interests in public companies, and changes in the market prices of the stock of suchpublic companies could have a material impact on our financial condition and results of operations. Globalsecurities markets have been highly volatile, and continued volatility may have a material negative impact on ourconsolidated financial position and results of operations.We have significant interests in Brookfield-sponsored real estate opportunity and finance funds, and poorinvestment returns in these funds could have a negative impact on our financial condition and results ofoperations.We have, and expect to continue to have in the future, significant interests in Brookfield-sponsored realestate opportunity and finance funds, and poor investment returns in these funds, due to either market conditionsor underperformance (relative to their competitors or to benchmarks), would negatively affect our financialcondition and results of operations. In addition, interests in such funds are subject to the risks inherent in theownership and operation of real estate and real estate-related businesses and assets generally.Our ownership of underperforming real estate properties involves significant risks and potential additionalliabilities.We hold interests in certain real estate properties with weak financial conditions, poor operating results,substantial financial needs, negative net worth or special competitive problems, or that are over-leveraged. Ourownership of underperforming real estate properties involves significant risks and potential additional liabilities.Our exposure to such underperforming properties may be substantial in relation to the market for those interestsand distressed assets may be illiquid and difficult to sell or transfer. As a result, it may take a number of years forthe fair value of such interests to ultimately reflect their intrinsic value as perceived by us.We face risks relating to the jurisdictions of our operations.We own and operate commercial properties in a number of jurisdictions, including but not limited toNorth America, Europe, Australia and Brazil. Our operations will be subject to significant political, economicand financial risks, which vary by jurisdiction, and may include:• changes in government policies or personnel;• restrictions on currency transfer or convertibility;• changes in labor relations;• political instability and civil unrest;• fluctuations in foreign exchange rates;• challenges of complying with a wide variety of foreign laws including corporate governance,operations, taxes and litigation;• differing lending practices;18

• differences in cultures;• changes in applicable laws and regulations that affect foreign operations;• difficulties in managing international operations;• obstacles to the repatriation of earnings and cash; and• breach or repudiation of important contractual undertakings by governmental entities andexpropriation and confiscation of assets and facilities for less than fair market value.We are subject to possible environmental liabilities and other possible liabilities.As an owner and manager of real property, we are subject to various laws relating to environmentalmatters. These laws could hold us liable for the costs of removal and remediation of certain hazardous substancesor wastes released or deposited on or in our properties or disposed of at other locations. These costs could besignificant and would reduce cash available for our business. The failure to remove or remediate such substancescould adversely affect our ability to sell our properties or our ability to borrow using real estate as collateral, andcould potentially result in claims or other proceedings against us. Environmental laws and regulations can changerapidly and we may become subject to more stringent environmental laws and regulations in the future.Compliance with more stringent environmental laws and regulations could have an adverse effect on ourbusiness, financial condition or results of operations.Regulations under building codes and human rights codes generally require that public buildings be madeaccessible to disabled persons. Non-compliance could result in the imposition of fines by the government or theaward of damages to private litigants. If we are required to make substantial alterations or capital expenditures toone or more of our properties, it could adversely affect our financial condition and results of operations.We may also incur significant costs complying with other regulations. Our properties are subject tovarious federal, state, provincial and local regulatory requirements, such as state, provincial and local fire and lifesafety requirements. If we fail to comply with these requirements, we could incur fines or be subject to privatedamage awards. Existing requirements may change and compliance with future requirements may requiresignificant unanticipated expenditures that may affect our cash flows and results from operations.We may suffer a significant loss resulting from fraud, other illegal acts and inadequate or failed internalprocesses or systems.We may suffer a significant loss resulting from fraud, other illegal acts and inadequate or failed internalprocesses or systems. We operate in different markets and rely on our employees to follow our policies andprocesses as well as applicable laws in their activities. Risk of illegal acts or failed systems is managed throughour infrastructure, controls, systems, policies and people, complemented by central groups focusing onenterprise-wide management of specific operational risks such as fraud, trading, outsourcing, and businessdisruption, as well as people and systems risks. Failure to manage these risks could result in direct or indirectfinancial loss, reputational impact, regulatory censure or failure in the management of other risks such as creditor market risk.We may be subject to litigation.In the ordinary course of our business, we may be subject to litigation from time to time. The outcome ofany such proceedings may materially adversely affect us and may continue without resolution for long periods oftime. Any litigation may consume substantial amounts of our management’s time and attention, and that time andthe devotion of these resources to litigation may, at times, be disproportionate to the amounts at stake in thelitigation.19

The acquisition, ownership and disposition of real property expose us to certain litigation risks whichcould result in losses, some of which may be material. Litigation may be commenced with respect to a propertywe have acquired in relation to activities that took place prior to our acquisition of such property. In addition, atthe time of disposition of an individual property, a potential buyer may claim that it should have been affordedthe opportunity to purchase the asset or alternatively that such buyer should be awarded due diligence expensesincurred or statutory damages for misrepresentation relating to disclosures made, if such buyer is passed over infavor of another as part of our efforts to maximize sale proceeds. Similarly, successful buyers may later sue usunder various damage theories, including those sounding in tort, for losses associated with latent defects or otherproblems not uncovered in due diligence. We may also be exposed to litigation resulting from the activities ofour tenants or their customers.We participate in transactions and make tax calculations for which the ultimate tax determination may beuncertain.We participate in many transactions and make tax calculations during the course of our business forwhich the ultimate tax determination is uncertain. While we believe we maintain provisions for uncertain taxpositions that appropriately reflect our risk, these provisions are made using estimates of the amounts expected tobe paid based on a qualitative assessment of several factors. It is possible that liabilities associated with one ormore transactions may exceed our provisions due to audits by, or litigation with, relevant taxing authoritieswhich may materially affect our financial condition and results of operations.Risks Relating to Our Relationship with BrookfieldBrookfield will exercise substantial influence over us and we are highly dependent on the Managers.Brookfield is the sole shareholder of the BPY General Partner. As a result of its ownership of the BPYGeneral Partner, Brookfield will be able to control the appointment and removal of the BPY General Partner’sdirectors and, accordingly, exercise substantial influence over us. In addition, the Managers, wholly-ownedsubsidiaries of Brookfield Asset Management, will provide management services to us pursuant to our MasterServices Agreement. Our company and the Property Partnership do not currently have any senior managementand will depend on the management and administration services provided by the Managers. Brookfield personneland support staff who provide services to us are not required to have as their primary responsibility themanagement and administration of our company or the Property Partnership or to work exclusively for either ourcompany or the Property Partnership. Any failure to effectively manage our business or to implement ourstrategy could have a material adverse effect on our business, financial condition and results of operations.Brookfield has no obligation to source acquisition opportunities for us and we may not have access to allacquisitions of commercial properties that Brookfield identifies.Our ability to grow will depend in part on Brookfield identifying and presenting us with acquisitionopportunities. We were established by Brookfield Asset Management as the primary entity through whichBrookfield Asset Management will own and operate its commercial property businesses on a global basis.However, Brookfield has no obligation to source acquisition opportunities specifically for us. In addition,Brookfield has not agreed to commit to us any minimum level of dedicated resources for the pursuit ofacquisitions of commercial property other than as contemplated by our Master Services Agreement. There are anumber of factors which could materially and adversely impact the extent to which acquisition opportunities aremade available to us by Brookfield.For example:• Brookfield will only recommend acquisition opportunities that it believes are suitable for us;20

• the same professionals within Brookfield’s organization who are involved in acquisitions ofcommercial property have other responsibilities within Brookfield’s broader asset managementbusiness. Limits on the availability of such individuals will likewise result in a limitation on theavailability of acquisition opportunities for us;• Brookfield may consider certain assets or operations that have both infrastructure relatedcharacteristics and commercial property related characteristics to be infrastructure and notcommercial property;• Brookfield may not consider an acquisition of commercial property that comprises part of a broaderenterprise to be suitable for us, unless the primary purpose of such acquisition, as determined byBrookfield acting in good faith, is to acquire the underlying commercial property;• legal, regulatory, tax and other commercial considerations will be an important factor indetermining whether an opportunity is suitable for us; and• in addition to structural limitations, the determination of whether a particular acquisition is suitablefor us is highly subjective and is dependent on a number of factors including our liquidity positionat the time, the risk profile of the opportunity, its fit with the balance of our business and otherfactors.The departure of some or all of Brookfield’s professionals could prevent us from achieving our objectives.We will depend on the diligence, skill and business contacts of Brookfield’s professionals and theinformation and opportunities they generate during the normal course of their activities. Our future success willdepend on the continued service of these individuals, who are not obligated to remain employed with Brookfield.Brookfield has experienced departures of key professionals in the past and may do so in the future, and wecannot predict the impact that any such departures will have on our ability to achieve our objectives. Thedeparture of a significant number of Brookfield’s professionals for any reason, or the failure to appoint qualifiedor effective successors in the event of such departures, could have a material adverse effect on our ability toachieve our objectives. Our limited partnership agreement and our Master Services Agreement do not requireBrookfield to maintain the employment of any of its professionals or to cause any particular professionals toprovide services to us or on our behalf.The control of the BPY General Partner may be transferred to a third party without unitholder consent.The BPY General Partner may transfer its general partnership interest in our company to a third party,including in a merger or consolidation or in a transfer of all or substantially all of its assets, without the consentof our unitholders. Furthermore, at any time, the sole shareholder of the BPY General Partner may sell or transferall or part of its shares in the BPY General Partner without the approval of our unitholders. If a new owner wereto acquire ownership of the BPY General Partner and to appoint new directors or officers of its own choosing, itwould be able to exercise substantial influence over our policies and procedures and exercise substantialinfluence over our management, our distributions and the types of acquisitions that we make. Such changes couldresult in our company’s capital being used to make acquisitions in which Brookfield has no involvement orwhich are substantially different from our targeted acquisitions. Additionally, we cannot predict with anycertainty the effect that any transfer in the ownership of the BPY General Partner would have on the trading priceof our units or our ability to raise capital or make investments in the future, because such matters would dependto a large extent on the identity of the new owner and the new owner’s intentions with regards to us. As a result,the future of our company would be uncertain and our financial condition and results of operations may suffer.Brookfield will not owe our unitholders any fiduciary duties under our Master Services Agreement or ourother arrangements with Brookfield.Our Master Services Agreement and our other arrangements with Brookfield do not impose on Brookfieldany duty (statutory or otherwise) to act in the best interests of the Service Recipients, nor do they impose other21

duties that are fiduciary in nature. As a result, the BPY General Partner, a wholly-owned subsidiary of BrookfieldAsset Management, in its capacity as our general partner, will have sole authority to enforce the terms of suchagreements and to consent to any waiver, modification or amendment of their provisions.Our limited partnership agreement and the Property Partnership’s limited partnership agreement containvarious provisions that modify the fiduciary duties that might otherwise be owed to our company and ourunitholders, including when conflicts of interest arise. These modifications may be important to our unitholdersbecause they restrict the remedies available for actions that might otherwise constitute a breach of fiduciary dutyand permit the BPY General Partner and the Property General Partner to take into account the interests of thirdparties, including Brookfield, when resolving conflicts of interest. See Item 7.B. “Major Shareholders andRelated Party Transactions — Related Party Transactions — Relationship with Brookfield — Conflicts ofInterest and Fiduciary Duties”. It is possible that conflicts of interest may be resolved in a manner that is not inthe best interests of our company or the best interests of our unitholders.Our organizational and ownership structure may create significant conflicts of interest that may be resolved ina manner that is not in the best interests of our company or the best interests of our unitholders.Our organizational and ownership structure involves a number of relationships that may give rise toconflicts of interest between us and our unitholders, on the one hand, and Brookfield, on the other hand. Incertain instances, the interests of Brookfield may differ from the interests of our company and our unitholders,including with respect to the types of acquisitions made, the timing and amount of distributions by us, thereinvestment of returns generated by our operations, the use of leverage when making acquisitions and theappointment of outside advisors and service providers, including as a result of the reasons described underItem 7.B. “Major Shareholders and Related Party Transactions — Related Party Transactions — Relationshipwith Brookfield”.Our arrangements with Brookfield have effectively been determined by Brookfield in the context of thespin-off and may contain terms that are less favorable than those which otherwise might have been obtainedfrom unrelated parties.The terms of our arrangements with Brookfield have effectively been determined by Brookfield in thecontext of the spin-off. These terms, including terms relating to compensation, contractual or fiduciary duties,conflicts of interest and Brookfield’s ability to engage in outside activities, including activities that compete withus, our activities and limitations on liability and indemnification, may be less favorable than those whichotherwise might have resulted if the negotiations had involved unrelated parties. The transfer agreements underwhich our assets and operations will be acquired from Brookfield prior to the spin-off do not containrepresentations and warranties or indemnities relating to the underlying assets and operations. Under our limitedpartnership agreement, persons who acquire our units and their transferees will be deemed to have agreed thatnone of those arrangements constitutes a breach of any duty that may be owed to them under our limitedpartnership agreement or any duty stated or implied by law or equity.The BPY General Partner may be unable or unwilling to terminate our Master Services Agreement.Our Master Services Agreement provides that the Service Recipients may terminate the agreement onlyif: (i) any of the Managers defaults in the performance or observance of any material term, condition or covenantcontained in the agreement in a manner that results in material harm to the Service Recipients and the defaultcontinues unremedied for a period of 60 days after written notice of the breach is given to such Manager; (ii) anyof the Managers engages in any act of fraud, misappropriation of funds or embezzlement against any ServiceRecipient that results in material harm to the Service Recipients; (iii) any of the Managers is grossly negligent inthe performance of its obligations under the Master Services Agreement and such gross negligence results inmaterial harm to the Service Recipients; or (iv) upon the happening of certain events relating to the bankruptcy orinsolvency of each of the Managers. The BPY General Partner cannot terminate the agreement for any otherreason, including if any of the Managers or Brookfield experiences a change of control, and there is no fixed term22

to the agreement. In addition, because the BPY General Partner is a wholly-owned subsidiary of BrookfieldAsset Management, it may be unwilling to terminate our Master Services Agreement, even in the case of adefault. If the Managers’ performance does not meet the expectations of investors, and the BPY General Partneris unable or unwilling to terminate our Master Services Agreement, the market price of our units could suffer.Furthermore, the termination of our Master Services Agreement would terminate our company’s rights under theRelationship Agreement and the licensing agreement. See “Relationship Agreement” and “Licensing Agreement”under Item 7.B. “Major Shareholders and Related Party Transactions — Related Party Transactions —Relationship with Brookfield”.The liability of the Managers will be limited under our arrangements with them and we will agree toindemnify the Managers against claims that they may face in connection with such arrangements, which maylead them to assume greater risks when making decisions relating to us than they otherwise would if actingsolely for their own account.Under our Master Services Agreement, the Managers will not assume any responsibility other than toprovide or arrange for the provision of the services described in our Master Services Agreement in good faith andwill not be responsible for any action that the BPY General Partner takes in following or declining to follow theiradvice or recommendations. In addition, under our limited partnership agreement, the liability of the BPYGeneral Partner and its affiliates, including the Managers, is limited to the fullest extent permitted by law toconduct involving bad faith, fraud, gross negligence or willful misconduct or, in the case of a criminal matter,action that was known to have been unlawful. The liability of the Managers under our Master ServicesAgreement will be similarly limited. In addition, we have agreed to indemnify the Managers to the fullest extentpermitted by law from and against any claims, liabilities, losses, damages, costs or expenses incurred by anindemnified person or threatened in connection with our operations, investments and activities or in respect of orarising from our Master Services Agreement or the services provided by the Managers, except to the extent thatthe claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the conduct inrespect of which such persons have liability as described above. These protections may result in the Managerstolerating greater risks when making decisions than otherwise would be the case, including when determiningwhether to use leverage in connection with acquisitions. The indemnification arrangements to which theManagers will be parties may also give rise to legal claims for indemnification that are adverse to our companyand our unitholders.Risks Relating to our UnitsThe price of our units may fluctuate significantly and you could lose all or part of the value of your units.The market price of our units may fluctuate significantly and you could lose all or part of the value ofyour units. Factors that may cause the price of our units to vary include:• changes in our financial performance and prospects and Brookfield’s financial performance andprospects, or in the financial performance and prospects of companies engaged in businesses thatare similar to us or Brookfield;• the termination of our Master Services Agreement or the departure of some or all of Brookfield’sprofessionals;• changes in laws or regulations, or new interpretations or applications of laws and regulations, thatare applicable to us;• sales of our units by our unitholders, including by Brookfield and/or other significant holders of ourunits;23

• general economic trends and other external factors, including those resulting from war, incidents ofterrorism or responses to such events;• speculation in the press or investment community regarding us or Brookfield or factors or eventsthat may directly or indirectly affect us or Brookfield;• our ability to raise capital on favorable terms; and• a loss of any major funding source.Securities markets in general have experienced extreme volatility that has often been unrelated to theoperating performance of particular companies or partnerships. Any broad market fluctuations may adverselyaffect the trading price of our units.Our units have never been publicly-traded and an active and liquid trading market for our units may notdevelop.Prior to the spin-off, there has not been a market for our units. We cannot predict the extent to whichinvestor interest will lead to the development of an active and liquid trading market for our units or, if such amarket develops, whether it will be maintained. We cannot predict the effects on the price of our units if a liquidand active trading market for our units does not develop. In addition, if such a market does not develop, relativelysmall sales of our units may have a significant negative impact on the price of our units.Our company may issue additional units in the future in lieu of incurring indebtedness which may diluteexisting holders of our units or our company may issue securities that have rights and privileges that are morefavorable than the rights and privileges accorded to holders of our units.Our company may issue additional securities, including units and options, rights, warrants andappreciation rights relating to partnership securities for any purpose and for such consideration and on such termsand conditions as the BPY General Partner may determine. The BPY General Partner’s board of directors will beable to determine the class, designations, preferences, rights, powers and duties of any additional partnershipsecurities, including any rights to share in our company’s profits, losses and distributions, any rights to receivepartnership assets upon a dissolution or liquidation of our company and any redemption, conversion andexchange rights. The BPY General Partner may use such authority to issue additional units, which would diluteexisting holders of our units, or to issue securities with rights and privileges that are more favorable than those ofour units. You will not have any right to consent to or otherwise approve the issuance of any such securities orthe terms on which any such securities may be issued.Future sales or issuances of our units in the public markets, or the perception of such sales, could depress themarket price of our units.The sale or issuance of a substantial number of our units or other equity-related securities in the publicmarkets, or the perception that such sales could occur, could depress the market price of our units and impair ourability to raise capital through the sale of additional equity securities. In addition, Brookfield expects its interestsin the Property Partnership to be reduced over time through mergers, treasury issuances or secondary sales whichcould also depress the market price of our units. We cannot predict the effect that future sales or issuances ofunits, other equity-related securities, or the limited partnership units of the Property Partnership would have onthe market price of our units.Our unitholders do not have a right to vote on partnership matters or to take part in the management of ourcompany.Under our limited partnership agreement, our unitholders are not entitled to vote on matters relating toour company, such as acquisitions, dispositions or financing, or to participate in the management or control of24

our company. In particular, our unitholders do not have the right to remove the BPY General Partner, to cause theBPY General Partner to withdraw from our company, to cause a new general partner to be admitted to ourpartnership, to appoint new directors to the BPY General Partner’s board of directors, to remove existingdirectors from the BPY General Partner’s board of directors or to prevent a change of control of the BPY GeneralPartner. In addition, except as prescribed by applicable laws, our unitholders’ consent rights apply only withrespect to certain amendments to our limited partnership agreement. As a result, unlike holders of common stockof a corporation, our unitholders will not be able to influence the direction of our company, including its policiesand procedures, or to cause a change in its management, even if they are dissatisfied with our performance.Consequently, our unitholders may be deprived of an opportunity to receive a premium for their units in thefuture through a sale of our company and the trading price of our units may be adversely affected by the absenceor a reduction of a takeover premium in the trading price.Our company is a Bermuda exempted limited partnership and it may not be possible for our investors to serveprocess on or enforce U.S. judgments against us.Our company is a Bermuda exempted limited partnership and a substantial portion of our assets arelocated outside the United States. In addition, certain of the directors of the BPY General Partner and certainmembers of the senior management team who will be principally responsible for providing us with managementservices reside outside of the United States. As a result, it may be difficult or impossible for U.S. investors toeffect service of process within the United States upon us or our directors and executive officers, or to enforce,against us or these persons, judgments obtained in the U.S. courts predicated upon the civil liability provisions ofU.S. federal securities laws. We believe that there is doubt as to the enforceability in Bermuda, in original actionsor in actions to enforce judgments of U.S. courts, of claims predicated solely upon U.S. federal securities laws.Risks Relating to TaxationGeneralChanges in tax law and practice may have a material adverse effect on the operations of our company, theHolding Entities, and our operating entities and, as a consequence, the value of our assets and the net amountof distributions payable to our unitholders.Our structure, including the structure of the Holding Entities and our operating entities, is based onprevailing taxation law and practice in the local jurisdictions in which we operate. Any change in tax legislation(including in relation to taxation rates) and practice in these jurisdictions could adversely affect these entities, aswell as the net amount of distributions payable to our unitholders. Taxes and other constraints that would applyto our operating entities in such jurisdictions may not apply to local institutions or other parties, and such partiesmay therefore have a significantly lower effective cost of capital and a corresponding competitive advantage inpursuing acquisitions.Our company’s ability to make distributions depends on it receiving sufficient cash distributions from itsunderlying operations, and we cannot assure unitholders that we will be able to make cash distributions inamounts that are sufficient to fund their tax liabilities.Our Holding Entities and operating entities may be subject to local taxes in each of the relevant territoriesand jurisdictions in which they operate, including taxes on income, profits or gains and withholding taxes. As aresult, our company’s cash available for distribution is indirectly reduced by such taxes, and the post-tax return toour unitholders is similarly reduced by such taxes. We intend for future acquisitions to be assessed on acase-by-case basis and, where possible and commercially viable, structured so as to minimize any adverse taxconsequences to our unitholders as a result of making such acquisitions.In general, a unitholder that is subject to income tax in the United States or Canada must include inincome its allocable share of our company’s items of income, gain, loss, and deduction (including, so long as it is25

treated as a partnership for tax purposes, our company’s allocable share of those items of the PropertyPartnership) for each of our company’s fiscal years ending with or within such unitholder’s tax year. SeeItem 10.E. “Additional Information — Taxation”. However, the cash distributed to a unitholder may not besufficient to pay the full amount of such unitholder’s tax liability in respect of its investment in our company,because each unitholder’s tax liability depends on such unitholder’s particular tax situation. If our company isunable to distribute cash in amounts that are sufficient to fund our unitholders’ tax liabilities, each of ourunitholders will still be required to pay income taxes on its share of our company’s taxable income.As a result of holding our units, our unitholders may be subject to U.S. federal, state, local or non-U.S. taxesand return filing obligations in jurisdictions in which they are not resident for tax purposes or otherwise notsubject to tax.Our unitholders may be subject to U.S. federal, state, local, and non-U.S. taxes, including unincorporatedbusiness taxes and estate, inheritance or intangible taxes that are imposed by the various jurisdictions in whichwe do business or own property now or in the future, even if our unitholders do not reside in any of thosejurisdictions. Our unitholders may be required to file income tax returns and pay income taxes in some or all ofthese jurisdictions. Further, our unitholders may be subject to penalties for failure to comply with theserequirements. Based on our organizational structure following the spin-off, as well as our company’s expectedincome and assets, the BPY General Partner and the Property General Partner currently believe that a unitholderis unlikely to incur an additional tax return filing obligation, solely as a result of owning our units, outside of thejurisdiction in which such unitholder is resident for tax purposes or otherwise is subject to tax. However, noassurance can be provided that this is currently the case or will be the case in the future. It is the responsibility ofeach unitholder to file all U.S. federal, state, local, and non-U.S. tax returns that may be required of suchunitholder.Our unitholders may be exposed to transfer pricing risks.To the extent that our company, the Property Partnership, the Holding Entities or our operating entitiesenter into transactions or arrangements with parties with whom they do not deal at arm’s length, includingBrookfield, the relevant tax authorities may seek to adjust the quantum or nature of the amounts received or paidby such entities if they consider that the terms and conditions of such transactions or arrangements differ fromthose that would have been made between persons dealing at arm’s length. This could result in more tax beingpaid by such entities, and therefore the return to investors could be reduced.The BPY General Partner and the Property General Partner believe that the base management fee and anyother amount that is paid to the Managers will be commensurate with the value of the services being provided bythe Managers and comparable to the fees or other amounts that would be agreed to in an arm’s lengtharrangement. However, no assurance can be given in this regard.If the relevant tax authority were to assert that an adjustment should be made under the transfer pricingrules to an amount that is relevant to the computation of the income of the Property Partnership or our company,such assertion could result in adjustments to amounts of income (or loss) allocated to our unitholders by ourcompany for tax purposes. In addition, our company might also be liable for transfer pricing penalties in respectof transfer pricing adjustments unless reasonable efforts were made to determine, and use, arm’s length transferprices. Generally, reasonable efforts in this regard are only considered to be made if contemporaneousdocumentation has been prepared in respect of such transactions or arrangements that support the transfer pricingmethodology.United StatesThe U.S. Internal Revenue Service, or IRS, may disagree with our valuation of the spin-off distribution.Our U.S. unitholders will be considered to receive a taxable distribution as a result of the spin-off equal tothe fair market value of our units received by them in the spin-off plus the amount of cash received in lieu of26

fractional units, without reduction for any Canadian tax withheld. We will use the five day volume weightedaverage of the trading price of our units for the five trading days immediately following the spin-off as the fairmarket value of our units for these purposes but this amount is not binding on the IRS. The IRS may disagreewith this valuation and this could result in increased tax liability to you.If either our company or the Property Partnership were to be treated as a corporation for U.S. federal incometax purposes, the value of our units might be adversely affected.The value of our units to our unitholders will depend in part on the treatment of our company and theProperty Partnership as partnerships for U.S. federal income tax purposes. In order for our company to be treatedas a partnership for U.S. federal income tax purposes, under present law, 90% or more of our company’s grossincome for every taxable year must consist of qualifying income, as defined in Section 7704 of the U.S. InternalRevenue Code of 1986, as amended, or the U.S. Internal Revenue Code, and the partnership must not be requiredto register, if it were a U.S. corporation, as an investment company under the U.S. Investment Company Act of1940 and related rules. Although the BPY General Partner intends to manage our affairs so that our company willnot need to be registered as an investment company if it were a U.S. corporation and so that it will meet the 90%test described above in each taxable year, our company may not meet these requirements, or current law maychange so as to cause, in either event, our company to be treated as a corporation for U.S. federal income taxpurposes. If our company (or the Property Partnership) were treated as a corporation for U.S. federal income taxpurposes, adverse U.S. federal income tax consequences could result for our unitholders and our company (or theProperty Partnership, as applicable), as described in greater detail in Item 10.E. “Additional Information —Taxation — U.S. Tax Considerations — Partnership Status of Our Company and the Property Partnership”.The failure of certain of our operating entities (or certain of their subsidiaries) to qualify as real estateinvestment trusts under U.S. federal income tax rules generally would have adverse tax consequences whichcould result in a material reduction in cash flow and after-tax return for our unitholders and thus could result in areduction of the value of our units.Certain of our operating entities (and certain of their subsidiaries), including operating entities in whichwe do not have a controlling interest, such as GGP, intend to qualify for taxation as REITs for U.S. federalincome tax purposes. However, no assurance can be provided that any such entity will qualify as a REIT. Anentity’s ability to qualify as a REIT depends on its satisfaction of certain asset, income, organizational,distribution, shareholder ownership, and other requirements on a continuing basis. No assurance can be providedthat the actual results of operations for any particular entity in a given taxable year will satisfy such requirements.If any such entity were to fail to qualify as a REIT in any taxable year, it would be subject to U.S. federal incometax, including any applicable alternative minimum tax, on its net taxable income at regular corporate rates, anddistributions would not be deductible by it in computing its taxable income. Any such corporate tax liabilitycould be substantial and could materially reduce the amount of cash available for distribution to our company,which in turn would materially reduce the amount of cash available for distribution to our unitholders orinvestment in our business and could have an adverse impact on the value of our units. Unless entitled to reliefunder certain U.S. federal income tax rules, any entity which so failed to qualify as a REIT would also bedisqualified from taxation as a REIT for the four taxable years following the year during which it ceased toqualify as a REIT.We may be subject to U.S. “backup” withholding tax or other U.S. withholding taxes if any unitholder fails tocomply with U.S. tax reporting rules or if the IRS or other applicable state or local taxing authority does notaccept our withholding methodology, and such excess withholding tax cost will be an expense borne by ourcompany and, therefore, all of our unitholders on a pro rata basis.We may become subject to U.S. backup withholding tax or other U.S. withholding taxes with respect toany U.S. or non-U.S. unitholder who fails to timely provide us (or the applicable intermediary) with an IRS FormW-9 or IRS Form W-8, as the case may be, or if the withholding methodology we use is not accepted by the IRS27

or applicable state or local taxing authorities. Accordingly, it is important that each of our unitholders timelyprovides us (or the relevant intermediary) with an IRS Form W-9 or IRS Form W-8, as applicable. In addition,under certain circumstances, our company may treat such U.S. backup withholding taxes or other U.S.withholding taxes as an expense, which will be borne indirectly by all unitholders on a pro rata basis. SeeItem 10.E. “Additional Information — Taxation — U.S. Tax Considerations — Administrative Matters —Withholding and Backup Withholding”.Tax-exempt organizations may face certain adverse U.S. tax consequences from owning our units.The BPY General Partner and the Property General Partner intend to use commercially reasonable effortsto structure the activities of our company and the Property Partnership, respectively, to avoid generating incomeconnected with the conduct of a trade or business (which income generally would constitute “unrelated businesstaxable income”, or UBTI, to the extent allocated to a tax-exempt organization). However, no assurance can beprovided that neither our company nor the Property Partnership will generate UBTI in the future. In particular,UBTI includes income attributable to debt-financed property, and neither our company nor the PropertyPartnership is prohibited from financing the acquisition of property with debt. The potential for income to becharacterized as UBTI could make our units an unsuitable investment for a tax-exempt organization, as addressedin greater detail in Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations — Consequencesto U.S. Holders — U.S. Taxation of Tax-Exempt U.S. Holders of Our Units”.There may be limitations on the deductibility of our company’s interest expense.So long as we are treated as a partnership for U.S. federal income tax purposes, each of our unitholdersthat is taxable in the United States generally will be taxed on its share of our company’s net taxable income.However, U.S. federal, state, or local income tax law may limit the deductibility of such unitholder’s share of ourcompany’s interest expense. Therefore, any such unitholder may be taxed on amounts in excess of suchunitholder’s share of the net income of our company. This could adversely impact the value of our units if ourcompany were to incur a significant amount of indebtedness. See Item 10.E. “Additional Information —Taxation — U.S. Tax Considerations — Consequences to U.S. Holders — Holding of Units — Limitations onInterest Deductions”.If our company were engaged in a U.S. trade or business, non-U.S. persons would face certain adverse U.S.tax consequences from owning our units.Based on our organizational structure following the spin-off, as well as our expected income and assets,the BPY General Partner and the Property General Partner currently believe that our company is unlikely to earnincome treated as effectively connected with a U.S. trade or business, including income attributable to the sale ofa “U.S. real property interest”, as defined in the U.S. Internal Revenue Code. It is possible, however, that ourcompany would be deemed to be engaged in a U.S. trade or business or to realize gain from the sale or otherdisposition of a U.S. real property interest. In such case, unitholders that are not U.S. persons would be requiredto file U.S. federal income tax returns and would be subject to U.S. federal withholding tax at rates as high as35%. See Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations — Consequences toNon-U.S. Holders”.To meet U.S. federal income tax and other objectives, our company and the Property Partnership may investthrough U.S. and non-U.S. Holding Entities that are treated as corporations for U.S. federal income taxpurposes, and such Holding Entities may be subject to corporate income tax.To meet U.S. federal income tax and other objectives, our company and the Property Partnership mayinvest through U.S. and non-U.S. Holding Entities that are treated as corporations for U.S. federal income taxpurposes, and such Holding Entities may be subject to corporate income tax. Consequently, items of income,gain, loss, deduction, or credit realized in the first instance by our operating entities will not flow, for U.S.28

federal income tax purposes, directly to the Property Partnership, our company, or our unitholders, and any suchincome or gain may be subject to a corporate income tax, in the U.S. or other jurisdictions, at the level of theHolding Entity. Any such additional taxes may adversely affect our company’s ability to maximize its cash flow.Certain of our Holding Entities or operating entities may be, or may be acquired through, an entity classifiedas a “passive foreign investment company” for U.S. federal income tax purposes.U.S. holders may face adverse U.S. tax consequences arising from the ownership of a direct or indirectinterest in a “passive foreign investment company”, or PFIC. Based on our organizational structure following thespin-off, as well as our expected income and assets, the BPY General Partner and the Property General Partnercurrently believe that one or more of our current Holding Entities and operating entities are likely to be classifiedas PFICs. In addition, we may in the future acquire certain investments or operating entities through one or moreHolding Entities treated as corporations for U.S. federal income tax purposes, and such future Holding Entities orother companies in which we acquire an interest may be treated as PFICs. Our unitholders that are taxable in theU.S. may experience adverse U.S. tax consequences as a result of owning an indirect interest in a PFIC throughour company. Investments in PFICs can produce taxable income prior to the receipt of cash relating to suchincome, and unitholders that are U.S. taxpayers generally would be required to take such income into account indetermining their taxable income. In addition, gain from the sale of stock of a PFIC generally is subject to tax atordinary income rates, and an interest charge generally applies. The adverse consequences of owning an interestin a PFIC, as well as certain tax elections for mitigating these adverse consequences, are described in greaterdetail in Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations — Consequences to U.S.Holders — Passive Foreign Investment Companies”. You should consult an independent tax adviser regardingthe implication of the PFIC rules for an investment in our units.Tax gain or loss from the disposition of our units could be more or less than expected.If you sell your units and are taxable in the United States, then you will recognize gain or loss for U.S.federal income tax purposes equal to the difference between the amount realized and your adjusted tax basis inyour units. Prior distributions to you in excess of the total net taxable income allocated to you will havedecreased your tax basis in your units. Therefore, such excess distributions will increase your taxable gain ordecrease your taxable loss when you sell your units, and may result in a taxable gain even if the sale price is lessthan the original cost. A portion of the amount realized, whether or not representing gain, could be ordinaryincome to you.Our partnership structure involves complex provisions of U.S. federal income tax law for which no clearprecedent or authority may be available. The tax characterization of our partnership structure is also subjectto potential legislative, judicial, or administrative change and differing interpretations, possibly on aretroactive basis.The U.S. federal income tax treatment of our unitholders depends in some instances on determinations offact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent orauthority may be available. Holders should be aware that the U.S. federal income tax rules, particularly thoseapplicable to partnerships, are constantly under review by the Congressional tax-writing committees and otherpersons involved in the legislative process, the IRS, the U.S. Treasury Department and the courts, frequentlyresulting in changes which could adversely affect the value of our units or cause our company to change the wayit conducts its activities. In addition, our company’s organizational documents and agreements permit the BPYGeneral Partner to modify our limited partnership agreement, without the consent of our unitholders, to addresssuch changes. These modifications could have a material adverse impact on our unitholders. See Item 10.E.“Additional Information — Taxation — U.S. Tax Considerations — New Legislation or Administrative orJudicial Action”.29

The IRS may not agree with certain assumptions and conventions that our company uses in order to complywith applicable U.S. federal income tax laws or that our company uses to report income, gain, loss, deduction,and credit to our unitholders.Our company will apply certain assumptions and conventions in order to comply with applicable tax lawsand to report income, gain, deduction, loss, and credit to a unitholder in a manner that reflects such unitholder’sbeneficial ownership of partnership items, taking into account variation in ownership interests during eachtaxable year because of trading activity. A successful IRS challenge to such assumptions or conventions couldadversely affect the amount of tax benefits available to our unitholders and could require that items of income,gain, deduction, loss, or credit, including interest deductions, be adjusted, reallocated or disallowed in a mannerthat adversely affects our unitholders. See Item 10.E. “Additional Information — Taxation — Consequences toU.S. Holders”.Our company’s delivery of required tax information for a taxable year may be subject to delay, which couldrequire a unitholder to request an extension of the due date for such unitholder’s income tax return.It may require longer than 90 days after the end of our company’s fiscal year to obtain the requisiteinformation from all lower-tier entities so that IRS Schedule K-1s may be prepared for our company. For thisreason, holders of our units who are U.S. taxpayers should anticipate the need to file annually with the IRS (andcertain states) a request for an extension past April 15 or the otherwise applicable due date of their income taxreturn for the taxable year. See Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations —Administrative Matters — Information Returns”.The sale or exchange of 50% or more of our units will result in the constructive termination of ourpartnership for U.S. federal income tax purposes.Our partnership will be considered to have been terminated for U.S. federal income tax purposes if thereis a sale or exchange of 50% or more of our units within a 12-month period. A constructive termination of ourpartnership would, among other things, result in the closing of its taxable year for U.S. federal income taxpurposes for all unitholders and could result in the possible acceleration of income to certain unitholders andcertain other consequences that could adversely affect the value of our units. However, the BPY General Partnerdoes not expect a constructive termination, should it occur, to have a material impact on the computation of thefuture taxable income generated by our company for U.S. income tax purposes. See Item 10.E. “AdditionalInformation — Taxation — U.S. Tax Considerations — Administrative Matters — Constructive Termination”.The U.S. Congress has considered legislation that could, if enacted, adversely affect our company’squalification as a partnership for U.S. federal tax purposes under the publicly-traded partnership rules andsubject certain income and gains to tax at increased rates. If this or similar legislation were to be enacted andto apply to our company, then the after-tax income of our company, as well as the market price of our units,could be reduced.Over the past several years, a number of legislative proposals have been introduced in the U.S. Congresswhich could have had adverse tax consequences for our company or the Property Partnership, including therecharacterization of certain items of capital gain income as ordinary income for U.S. federal income taxpurposes. However, such legislation was not enacted into law. The Obama administration has indicated itsupports such legislation and has proposed that the current law regarding the treatment of such items of capitalgain income be changed to subject such income to ordinary income tax. For further detail on such proposedlegislation, see Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations — ProposedLegislation”.30

Under legislation recently enacted by the U.S. Congress, certain payments of U.S.-source income (as well asgross proceeds from the disposition of property that could produce such income) made to our company or theProperty Partnership on or after January 1, 2014, could be subject to a 30% federal withholding tax, unless anexception applies.Under recently enacted U.S. legislation, certain payments of U.S.-source income made on or afterJanuary 1, 2014 (as well as payments attributable to dispositions of property which produce or could producecertain U.S.-source income) to our company or by our company to or through non-U.S. financial institutions ornon-U.S. entities, could be subject to a 30% withholding tax under certain circumstances, as described in greaterdetail in Item 10.E. “Additional Information — Taxation — U.S. Tax Considerations — Administrative Matters— Additional Withholding Requirements”.CanadaCanada Revenue Agency may disagree with our valuation of the spin-off dividend.Our unitholders will be considered to receive a dividend upon the spin-off equal to the fair market valueof the units of our company received upon the spin-off plus the amount of any cash received in lieu of fractionalunits. We will use the volume weighted average trading price of our units on the NYSE for the five trading daysimmediately following the spin-off as the fair market value of our units for these purposes but this amount is notbinding on the Canada Revenue Agency, or CRA. CRA may disagree with this valuation and this could result inincreased tax liability to you.If any non-Canadian subsidiaries in which the Property Partnership directly invests earn income that ischaracterized as “foreign accrual property income”, or FAPI, as defined in the Income Tax Act (Canada), orthe Tax Act, our unitholders may be required to include amounts allocated from our company in computingtheir income for Canadian federal income tax purposes even though there may be no corresponding cashdistribution.Any non-resident subsidiaries in which the Property Partnership directly invests are expected to be“foreign affiliates” and “controlled foreign affiliates”, each as defined in the Tax Act, collectively referred toherein as CFAs, of the Property Partnership. If any of such non-Canadian subsidiaries earns income that is FAPIin a particular taxation year of the CFA, the Property Partnership’s proportionate share of such FAPI must beincluded in computing the income of the Property Partnership for Canadian federal income tax purposes for thefiscal period of the Property Partnership in which the taxation year of such CFA that earned the FAPI ends,whether or not the Property Partnership actually receives a distribution of such income. Our company willinclude its share of such FAPI of the Property Partnership in computing its income for Canadian federal incometax purposes and our unitholders will be required to include their proportionate share of such FAPI allocatedfrom our company in computing their income for Canadian federal income tax purposes. As a result, ourunitholders may be required to include amounts in their income even though they have not and may not receivean actual cash distribution of such amount.The Canadian federal income tax consequences to you could be materially different in certain respects fromthose described in this Form 20-F if our company or the Property Partnership is a “SIFT partnership”.Under the rules in the Tax Act applicable to a “SIFT partnership”, or the SIFT Rules, certain income andgains earned by a “SIFT partnership” will be subject to income tax at the partnership level at a rate similar to acorporation and allocations of such income and gains to its partners will be taxed as a dividend from a taxableCanadian corporation. In particular, a “SIFT partnership” will be required to pay a tax on the total of its incomefrom businesses carried on in Canada, income from “non-portfolio properties” as defined in the Tax Act (otherthan taxable dividends), and taxable capital gains from dispositions of non-portfolio properties. “Non-portfolioproperties” include, among other things, equity interests or debt of corporations, trusts or partnerships that are31

esident in Canada, and of non-resident persons or partnerships the principal source of income of which is one orany combination of sources in Canada (other than an “excluded subsidiary entity” as defined in the Tax Act), thatare held by the “SIFT partnership” and have a fair market value that is greater than 10% of the equity value ofsuch entity, or that have, together with debt or equity that the “SIFT partnership” holds of entities affiliated(within the meaning of the Tax Act) with such entity, an aggregate fair market value that is greater than 50% ofthe equity value of the “SIFT partnership”. The tax rate that is applied to the above mentioned sources of incomeand gains is set at a rate equal to the “net federal corporate rate”, plus the “provincial SIFT tax rate”, each asdefined in the Tax Act.Under the SIFT Rules, our company and the Property Partnership could each be a “SIFT partnership” forany taxation year in which either is a “Canadian resident partnership”. Our company and the Property Partnershipwill be a “Canadian resident partnership” if the central management and control of these partnerships is locatedin Canada. This determination is a question of fact and is expected to depend on where the BPY General Partnerand the Property General Partner are located and exercise central management and control of the respectivepartnerships. The BPY General Partner and the Property General Partner advise that they will each takeappropriate steps so that the central management and control of these entities is not located in Canada such thatthe SIFT Rules should not apply to our company or to the Property Partnership at any relevant time. However, noassurance can be given in this regard. If our company or the Property Partnership is a “SIFT partnership”, theCanadian income tax consequences to our unitholders could be materially different in certain respects from thosedescribed in Item 10.E. “Additional Information — Taxation — Canadian Federal Income Tax Considerations”.On July 20, 2011, the Minister of Finance (Canada), or the Minister, announced tax proposals to amendthe definition of “excluded subsidiary entity” for purposes of the SIFT Rules. Based on the limited details ofthese tax proposals provided by the Minister, these tax proposals should have no impact on the PropertyPartnership’s qualification as an “excluded subsidiary entity”. However no assurance can be given in this regard.In addition, there can be no assurance that the SIFT Rules will not be revised or amended in the future such thatthe SIFT Rules will apply to our company or to the Property Partnership.Unitholders may be required to include imputed amounts in their income for Canadian federal income taxpurposes in accordance with existing section 94.1 of the Tax Act as proposed to be amended under taxproposals announced on March 4, 2010 and contained in draft tax proposals released on August 27, 2010, if,it is reasonable to conclude, having regard to all the circumstances, that one of the main reasons for theunitholder, our company or the Property Partnership acquiring or holding an investment in a non-residententity is to derive a benefit from “portfolio investments” as defined in the Tax Act in such a manner that taxesunder the Tax Act on income, profits and gains for any year are significantly less than they would have been ifsuch income, profits and gains had been earned directly.On March 4, 2010, the Minister announced as part of the 2010 Canadian federal budget that theoutstanding tax proposals regarding investments in “foreign investment entities” would be replaced with revisedtax proposals under which the existing rules in section 94.1 of the Tax Act relating to investments in “offshoreinvestment fund property” would remain in place subject to certain limited enhancements. On August 27, 2010,the Minister released draft legislation to implement the revised tax proposals. Existing section 94.1 of the TaxAct contains rules relating to investments in non-resident entities that could in certain circumstances causeincome to be imputed to unitholders for Canadian federal income tax purposes, either directly or by way ofallocation of such income imputed to our company or to the Property Partnership. These rules would apply if it isreasonable to conclude, having regard to all the circumstances, that one of the main reasons for the unitholder,our company or the Property Partnership acquiring or holding an investment in a non-resident entity is to derive abenefit from “portfolio investments” in such a manner that taxes under the Tax Act on income, profits and gainsfor any year are significantly less than they would have been if such income, profits and gains had been earneddirectly. In determining whether this is the case, existing section 94.1 of the Tax Act provides that considerationmust be given to, among other factors, the extent to which the income, profits and gains for any fiscal period aredistributed in that or the immediately following fiscal period. If these rules apply to a unitholder, our company or32

the Property Partnership, income for Canadian federal income tax purposes will be imputed directly to theunitholder or to our company or the Property Partnership and allocated to the unitholder in accordance with therules in existing section 94.1 of the Tax Act as proposed to be amended. No assurance can be given that existingsection 94.1, as proposed to be amended, will not apply to a unitholder, our company or the Property Partnership.The rules in existing section 94.1 of the Tax Act are complex and investors should consult their own tax advisorsregarding the application of these rules to them in their particular circumstances.Our units may or may not continue to be “qualified investments” under the Tax Act for registered plans.Provided that our units are listed on a “designated stock exchange” as defined in the Tax Act (whichincludes the NYSE and the Toronto Stock Exchange, or TSX), our units will be “qualified investments” underthe Tax Act for a trust governed by a registered retirement saving plan, or RRSP, deferred profit sharing plan,registered retirement income fund, or RRIF, registered education saving plan, registered disability saving plan,and a tax-free savings account, or TFSA. However, there can be no assurance that our units will be listed orcontinue to be listed on a designated stock exchange. There can also be no assurance that tax laws relating toqualified investments will not be changed. Taxes may be imposed in respect of the acquisition or holding ofnon-qualified investments by such registered plans and certain other taxpayers and with respect to the acquisitionor holding of “prohibited investments” as defined in the Tax Act by a RRSP, RRIF or TFSA.Our units will not be a “prohibited investment” for a trust governed by a RRSP, RRIF or TFSA, providedthat the holder of the TFSA or the annuitant of the RRSP or RRIF, as the case may be, deals at arm’s length withour company for purposes of the Tax Act and does not have a “significant interest”, as defined in the Tax Act forpurposes of the prohibited investment rules, in our company or in a corporation, partnership or trust with whichwe do not deal at arm’s length for purposes of the Tax Act. Investors who hold their units in a RRSP, RRIF orTFSA should consult their own tax advisors to ensure that our units will not be “prohibited investments” in theirparticular circumstances.Unitholders who are not resident in Canada or deemed to be resident in Canada, or a non-Canadian limitedpartnership, may be subject to Canadian federal income tax with respect to any Canadian source businessincome earned by our company or the Property Partnership if our company or the Property Partnership wereconsidered to carry on business in Canada.If our company or the Property Partnership were considered to carry on a business in Canada for purposesof the Tax Act, non-Canadian limited partners would be subject to Canadian federal income tax on theirproportionate share of any Canadian source business income earned or considered to be earned by our company,subject to the potential application of the safe harbour rule in section 115.2 of the Tax Act, as proposed to beamended under proposed amendments to the Tax Act announced by the Minister on October 31, 2010, and anyrelief that may be provided by any relevant income tax treaty or convention.The BPY General Partner and the Property General Partner intend to manage the affairs of our companyand the Property Partnership, to the extent possible, so that they do not carry on business in Canada and are notconsidered or deemed to carry on business in Canada for purposes of the Tax Act. Nevertheless, because thedetermination of whether our company or the Property Partnership is carrying on business and, if so, whether thatbusiness is carried on in Canada, is a question of fact that is dependent upon the surrounding circumstances, theCRA might contend successfully that either or both of our company and the Property Partnership carries onbusiness in Canada for purposes of the Tax Act.If our company or the Property Partnership is considered to carry on business in Canada or is deemed tocarry on business in Canada for the purposes of the Tax Act, non-Canadian limited partners that are corporationswould be required to file a Canadian federal income tax return for each year in which they are a non-Canadianlimited partner regardless of whether relief from Canadian taxation is available under an applicable income taxtreaty or convention. Non-Canadian limited partners who are individuals would only be required to file a33

Canadian federal income tax return for any taxation year in which they are allocated income from our companyfrom carrying on business in Canada that is not exempt from Canadian taxation under the terms of an applicableincome tax treaty or convention.Non-Canadian limited partners may be subject to Canadian federal income tax on capital gains realized byour company or the Property Partnership on dispositions of “taxable Canadian property” as defined in theTax Act.A non-Canadian limited partner will be subject to Canadian federal income tax on its proportionate shareof capital gains realized by our company or the Property Partnership on the disposition of “taxable Canadianproperty”, other than “treaty protected property”, as defined in the Tax Act. “Taxable Canadian property”includes, but is not limited to, property that is used or held in a business carried on in Canada and shares ofcorporations resident in Canada that are not listed on a “designated stock exchange”, as defined in the Tax Act, ifmore than 50% of the fair market value of the shares is derived from certain Canadian properties during the60-month period immediately preceding the disposition. Property of our company and the Property Partnershipgenerally will be “treaty-protected property” to a non-Canadian limited partner if the gain from the disposition ofthe property would, because of an applicable income tax treaty or convention, be exempt from tax under the TaxAct. Our company and the Property Partnership are not expected to realize capital gains or losses fromdispositions of “taxable Canadian property”. However, no assurance can be given in this regard. Non-Canadianlimited partners will be required to file a Canadian federal income tax return in respect of a disposition of“taxable Canadian property” by our company or the Property Partnership unless the disposition is an “excludeddisposition” for the purposes of section 150 of the Tax Act. However, non-Canadian limited partners that arecorporations will still be required to file a Canadian federal income tax return in respect of a disposition of“taxable Canadian property” that is an “excluded disposition” for the purposes of section 150 of the Tax Act iftax would otherwise be payable under Part I of the Tax Act by such non-Canadian limited partners in respect ofthe disposition but is not because of a tax treaty (otherwise than in respect of a disposition of “taxable Canadianproperty” that is “treaty-protected property of the corporation). In general, an “excluded disposition” is adisposition of property by a taxpayer in a taxation year where: (i) the taxpayer is a non-resident of Canada at thetime of the disposition; (ii) no tax is payable by the taxpayer under Part I of the Tax Act for the taxation year;(iii) the taxpayer is not liable to pay any amounts under the Tax Act in respect of any previous taxation year(other than certain amounts for which the CRA holds adequate security); and (iv) each “taxable Canadianproperty” disposed of by the taxpayer in the taxation year is either: (i) “excluded property” (as defined insubsection 116(6) of the Tax Act); or (ii) is property in respect of the disposition of which a certificate undersubsection 116(2), (4) or (5.2) has been issued by the CRA. Non-Canadian limited partners should consult theirown tax advisors with respect to the requirements to file a Canadian federal income tax return in respect of adisposition of “taxable Canadian property” by our company or the Property Partnership.Non-Canadian limited partners may be subject to Canadian federal income tax on capital gains realized onthe disposition of our units if our units are “taxable Canadian property”.Any capital gain arising from the disposition or deemed disposition of our units by a non-Canadianlimited partner will be subject to taxation in Canada, if, at the time of the disposition or deemed disposition, ourunits are “taxable Canadian property” of the non-Canadian limited partner, unless our units are “treaty-protectedproperty” to such non-Canadian limited partner. In general, our units will not constitute “taxable Canadianproperty” of any non-Canadian limited partner at the time of disposition or deemed disposition, unless (a) at anytime in the 60-month period immediately preceding the disposition or deemed disposition, more than 50% of thefair market value of our units was derived, directly or indirectly (under proposed amendments to the Tax Actannounced by the Minister on August 27, 2010, excluding through a corporation, partnership or trust, the sharesor interest in which were not themselves “taxable Canadian property”), from one or any combination of: (i) realor immovable property situated in Canada; (ii) “Canadian resource property” as defined in the Tax Act;(iii) “timber resource property” as defined in the Tax Act; and (iv) options in respect of or interests in, or for civillaw rights in, such property, whether or not such property exists, or (b) our units are otherwise deemed to be34

“taxable Canadian property”. Units of our company will be “treaty protected property” if the gain on thedisposition of our units is exempt from tax under the Tax Act under the terms of an applicable income tax treatyor convention. It is not expected that our units will constitute “taxable Canadian property” at any time but noassurance can be given in this regard. If our units constitute “taxable Canadian property”, non-Canadian limitedpartners will be required to file a Canadian federal income tax return in respect of a disposition of or units unlessthe disposition is an “excluded disposition” (as discussed above). If our units constitute “taxable Canadianproperty”, non-Canadian limited partners should consult their own tax advisors with respect to the requirement tofile a Canadian federal income tax return in respect of a disposition of our units.Non-Canadian limited partners may be subject to Canadian federal income tax reporting and withholding taxrequirements on the disposition of “taxable Canadian property”.Non-Canadian limited partners who dispose of “taxable Canadian property”, other than “excludedproperty”, as defined in subsection 116(6) of the Tax Act, and certain other property described in subsection116(5.2) of the Tax Act, (or who are considered to have disposed of such property on the disposition of suchproperty by our company or the Property Partnership), are obligated to comply with the procedures set out insection 116 of the Tax Act and obtain a certificate thereunder. In order to obtain such certificate, thenon-Canadian limited partner is required to report certain particulars relating to the transaction to CRA not laterthan 10 days after the disposition occurs. Our units are not expected to be “taxable Canadian property” andneither our company nor the Property Partnership is expected to dispose of property that is “taxable Canadianproperty” but no assurance can be given in these regards.Payments of dividends or interest (other than interest exempt from Canadian federal withholding tax) byresidents of Canada to the Property Partnership will be subject to Canadian federal withholding tax and wemay be unable to apply a reduced rate taking into account the residency or entitlement to relief under anapplicable income tax treaty or convention of our unitholders.Our company and the Property Partnership will be deemed to be a non-resident person in respect ofcertain amounts paid or credited to them by a person resident or deemed to be resident in Canada, includingdividends or interest. Dividends or interest (other than interest exempt from Canadian federal withholding tax)paid by a person resident or deemed to be resident in Canada to the Property Partnership will be subject towithholding tax under Part XIII of the Tax Act at the rate of 25%. However, the CRA’s administrative practice insimilar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to becomputed by looking through the partnership and taking into account the residency of the partners (includingpartners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that anynon-Canadian limited partners may be entitled to under an applicable income tax treaty or convention providedthat the residency status and entitlement to treaty benefits can be established. In determining the rate of Canadianfederal withholding tax applicable to amounts paid by the Holding Entities to the Property Partnership, we expectthe Holding Entities to look-through the Property Partnership and our company to the residency of the partners ofour company (including partners who are residents of Canada) and to take into account any reduced rates ofCanadian federal withholding tax that non-Canadian limited partners may be entitled to under an applicableincome tax treaty or convention in order to determine the appropriate amount of Canadian federal withholdingtax to withhold from dividends or interest paid to the Property Partnership. However, there can be no assurancethat the CRA will apply its administrative practice in this context. If the CRA’s administrative practice is notapplied and the Holding Entities withhold Canadian federal withholding tax from applicable payments on a lookthroughbasis, the Holding Entities may be liable for additional amounts of Canadian federal withholding tax plusany associated interest and penalties. Under the Canada-United States Tax Convention, or the Treaty, a Canadianresident payer is required in certain circumstances to look-through fiscally transparent partnerships, such as ourcompany and the Property Partnership, to the residency and treaty entitlements of their partners and take intoaccount the reduced rates of Canadian federal withholding tax that such partners may be entitled to under theTreaty.35

While the BPY General Partner and the Property General Partner expect the Holding Entities to lookthroughour company and the Property Partnership in determining the rate of Canadian federal withholding taxapplicable to amounts paid by the Holding Entities to the Property Partnership, we may be unable to accurately ortimely determine the residency of our unitholders for purposes of establishing the extent to which Canadianfederal withholding taxes apply or whether reduced rates of withholding tax apply to some or all of ourunitholders. In such a case, the Holding Entities will withhold Canadian federal withholding tax from allpayments made to the Property Partnership that are subject to Canadian federal withholding tax at the rate of25%. Canadian resident unitholders will be entitled to claim a credit for such taxes against their Canadian federalincome tax liability but non-Canadian limited partners will need to take certain steps to receive a refund or creditin respect of any such Canadian federal withholding taxes withheld equal to the difference between thewithholding tax at a rate of 25% and the withholding tax at the reduced rate they are entitled to under anapplicable income tax treaty or convention. See Item 10.E. “Additional Information — Taxation — CanadianFederal Income Tax Considerations” for further detail. Investors should consult their own tax advisorsconcerning all aspects of Canadian federal withholding taxes.ITEM 4. INFORMATION ON THE COMPANY4.A. HISTORY AND DEVELOPMENT OF THE COMPANYOur company is a leading global owner, operator and investor in high quality commercial property. Weinvest in well-located real estate assets that generate, or have the potential to generate, long-term, predictable andsustainable cash flows with attractive growth and development potential in some of the world’s most resilient anddynamic markets. We seek to enhance the cash flows and value of these assets through active asset managementand our operations-oriented approach. Our properties are located in North America, Europe, Australia and Braziland we may pursue growth in other markets where we identify attractive opportunities to build operatingplatforms or acquire assets and to achieve strong risk-adjusted returns. We strive to invest at attractive valuations,particularly in distress situations that create opportunities for superior valuation gains and cash flow returns, or tomonetize assets at appropriate times to realize value.Prior to the spin-off, we will acquire from Brookfield Asset Management substantially all of itscommercial property operations, including its office, retail, multi-family and industrial assets. We will beBrookfield’s flagship public commercial property entity and the primary entity through which Brookfield AssetManagement owns and operates these businesses on a global basis. We are positioned to take advantage ofBrookfield’s global presence, providing unitholders with the opportunity to benefit from Brookfield’s operatingexperience, execution abilities and global relationships.Given the size and scope of our business, we expect that we will have significant flexibility in sourcingand allocating real estate capital on a global basis and a strong global franchise to generate growth. We plan togrow by acquiring positions of control or influence over the assets in which we invest using a variety ofstrategies to target assets directly or through portfolios and corporate entities. Our goal is to be a premier entityfor investors seeking exposure to commercial property across a wide spectrum of real estate sectors andgeographies.Our general partner and the general partner of the Property Partnership are wholly-owned subsidiaries ofBrookfield Asset Management. In addition, wholly-owned subsidiaries of Brookfield Asset Management willprovide management services to us pursuant to our Master Services Agreement.Our company was established on January 3, 2012 as a Bermuda exempted limited partnership registeredunder the Bermuda Limited Partnership Act of 1883, as amended, and the Bermuda Exempted Partnerships Actof 1992, as amended. Our company’s head and registered office is 73 Front Street, 5th Floor, Hamilton HM 12,Bermuda, and our company’s telephone number is +441 294-3304.36

THE SPIN-OFFBackground to and Purpose of the Spin-OffBrookfield’s goal is to establish itself as the asset manager of choice for investors in real estate,infrastructure, power and private equity. In 2007, Brookfield Asset Management established BrookfieldInfrastructure Partners L.P. as its primary entity to own and operate infrastructure assets on a global basis. In2011, Brookfield Asset Management established Brookfield Renewable Energy Partners L.P. as its primaryentity to own and operate renewable power assets on a global basis. Our company will be the primary entitythrough which Brookfield Asset Management owns and operates its commercial property businesses on a globalbasis. Brookfield, through affiliates, manages and is a significant owner of all these entities.BROOKFIELD ASSETMANAGEMENT28% 68% 90% (1) 100%BROOKFIELDINFRASTRUCTUREPARTNERS(infrastructure)(public)BROOKFIELDRENEWABLE ENERGYPARTNERS(renewable power)(public)BROOKFIELDPROPERTY PARTNERS(commercial property)(public)BROOKFIELDPRIVATE EQUITYPARTNERS(private equity)(private)(1) Estimated.In creating our company, Brookfield has contributed substantially all of its commercial propertyoperations into one entity. The spin-off of our units is intended to achieve the following objectives forBrookfield:• Create a company positioned to pay distributions at higher yields than the current dividend yield onthe Class A and Class B limited voting shares of Brookfield Asset Management.• Create a company with significant market capitalization that, together with planned listings on theNYSE and the TSX, will provide an attractive currency to source and execute large-scaletransactions across a wide spectrum of commercial real estate sectors and geographies.• Delineate and emphasize the scale and value of our commercial property operations forshareholders of Brookfield Asset Management.• Provide greater transparency for Brookfield as a global asset manager.Mechanics of the Spin-OffBrookfield Asset Management intends to make a special dividend of % of our units to holders ofits Class A limited voting shares and Class B limited voting shares, pursuant to which holders of Class A limitedvoting shares and Class B limited voting shares of Brookfield Asset Management will be entitled to receive oneof our units for every Class A limited voting shares or Class B limited voting shares held as of the recorddate of the special dividend. Based on approximately 618 million Class A limited voting shares and 85,120 ClassB limited voting shares of Brookfield Asset Management that we expect to be outstanding on the record date forthe spin-off, Brookfield Asset Management intends to make a special dividend of approximately millionunits of our company. Immediately after the spin-off, Brookfield Asset Management will hold approximatelyof our units, or approximately % of our outstanding units.37

Holders of Brookfield Asset Management’s Class A limited voting shares or Class B limited votingshares will not be required to pay for the units to be received upon consummation of the spin-off or tender orsurrender Class A limited voting shares or Class B limited voting shares of Brookfield Asset Management or takeany other action in connection with the spin-off. No vote of Brookfield Asset Management’s shareholders will berequired for the spin-off. If a holder owns Brookfield Asset Management Class A limited voting shares orClass B limited voting shares as of the close of business on the record date of the special dividend, a certificatereflecting the holder’s ownership of our units will be mailed the holder, or the holder’s brokerage account will becredited for our units, on or about , 2012. The number of Class A limited voting shares and Class Blimited voting shares of Brookfield Asset Management that a holder owns will not change as a result of the spinoff.Brookfield Asset Management’s Class A limited voting shares and Class B limited voting shares willcontinue to be traded on the NYSE under the symbol “BAM”, on the TSX under the symbol “BAM.A” and onthe NYSE Euronext under the symbol “BAMA”.No holder will be entitled to receive any fractional interests in our units. Holders who would otherwise beentitled to a fractional unit will receive a cash payment. It is currently anticipated that, immediately following thespin-off, holders of Class A limited voting shares and Class B limited voting shares of Brookfield AssetManagement will hold units of our company representing in the aggregate an effective economic interest in ourbusiness of approximately 10% and Brookfield Asset Management will hold a combination of units of ourcompany and Redemption-Exchange Units of the Property Partnership representing an effective economicinterest in our business of approximately 90%. Brookfield Asset Management expects its interest to be reducedfrom this level over time through mergers, treasury issuances or secondary sales.Limited partners who acquire our units pursuant to the spin-off will be considered to have received ataxable dividend for Canadian federal income tax purposes equal to the fair market value of our units so received(as determined by reference to the five day volume-weighted average of the trading price of our units followingclosing of the spin-off) plus the amount of any cash received in lieu of fractional units. Non-Canadian residentlimited partners will be subject to Canadian federal withholding tax at the rate of 25% on the amount of thespecial dividend, subject to reduction under terms of an applicable income tax treaty or convention. Limitedpartners who are taxable in the United States and who acquire our units pursuant to the spin-off generally will beconsidered to have received a taxable distribution for U.S. federal income tax purposes equal to the fair marketvalue of our units so received plus the amount of any cash received in lieu of fractional units, without reductionfor the amount of any Canadian tax withheld. A limited partner who is taxable in the United States may besubject to U.S. “backup” withholding tax if such limited partner fails to timely provide Brookfield AssetManagement (or the relevant intermediary) with a properly completed IRS Form W-9. U.S. backup withholdingtax is not an additional tax, and any amounts withheld under the backup withholding rules will be allowed as acredit against a limited partner’s U.S. federal income tax liability (or as a refund if in excess of such liability)provided the required information is timely furnished to the IRS. To satisfy the withholding tax liabilities ofnon-Canadian registered shareholders of Brookfield Asset Management, Brookfield Asset Management willwithhold a nominal amount of our units otherwise distributable and a portion of any cash distribution in lieu offractional units otherwise distributable. Brookfield Asset Management will purchase these withheld units at aprice equal to the fair market value of our units determined by reference to the five day volume-weighted averageof the trading price of our units following closing of the spin-off. The proceeds of this sale of the withheld unitstogether with the amount of any cash withheld from any cash distribution in lieu of fractional units will beremitted to the Canadian federal government or the U.S. federal government (as applicable) in satisfaction of thewithholding tax liabilities described above. We estimate that the satisfaction of the Canadian federal and U.S.“backup” withholding tax obligations will result in Brookfield Asset Management withholding less than 1% ofour outstanding units. For non-Canadian beneficial shareholders, these withholding tax obligations will besatisfied in the ordinary course through arrangements with their broker or other intermediary. See Item 10.E“Additional Information — Taxation” which qualifies in its entirety the foregoing discussion.38

Transaction AgreementsOur company and Brookfield Asset Management have entered into a master purchase agreement, whichevidences the intent of Brookfield Asset Management to cause the Property Partnership to acquire, through theHolding Entities, substantially all of Brookfield Asset Management’s commercial property operations and ourcompany’s intention to acquire an interest in the Property Partnership through our company’s ownership of theClass A non-voting limited partnership interests in the Property Partnership. Our assets and operations will beacquired from Brookfield pursuant to separate securities purchase agreements and other agreements. Thesetransfer agreements will each contain representations and warranties and related indemnities to us fromBrookfield, including representations and warranties concerning: (i) organization and good standing; (ii) theauthorization, execution, delivery and enforceability of the agreement and all agreements executed in connectiontherewith; and (iii) title to the securities being transferred to us. The transfer agreements will not containrepresentations and warranties or indemnities relating to the underlying assets and operations.A copy of the master purchase agreement will be available electronically on the website of the SEC atwww.sec.gov and our SEDAR profile at www.sedar.com and will be made available to our unitholders asdescribed under Item 10.C. “Additional Information — Material Contracts” and Item 10.H. “Documents onDisplay”.In consideration for causing the Property Partnership to acquire substantially all of Brookfield AssetManagement’s commercial property operations, Brookfield will receive (i) units of our company andRedemption-Exchange Units of the Property Partnership representing, in aggregate, an effective economicinterest in our business of approximately 90%, (ii) $750 million of redeemable preferred shares of one of ourHoldings Entities formed under the laws of the Province of Ontario and (iii) $15 million of preferred shares ofthe other three Holding Entities (or wholly-owned subsidiaries thereof). For a discussion of the terms of thepreferred shares see Item 7.B. “Major Shareholders and Related Party Transactions — Related PartyTransactions — Relationship with Brookfield — Preferred Shares of Certain Holding Entities”.4.B. BUSINESS OVERVIEWOverview of our BusinessOur company is a leading global owner, operator and investor in high quality commercial property. Werecently acquired from Brookfield Asset Management substantially all of its commercial property operations,including its office, retail, multi-family and industrial assets.Our portfolio as of March 31, 2012 included interests in 124 office properties totaling 82 million square feetand 182 retail properties containing approximately 164 million square feet. We also held interests in an18 million square foot office development pipeline and a $350 million retail redevelopment pipeline as furtherdiscussed below. In addition, as of March 31, 2012 we had an expanding multi-family and industrial platformwhich consisted of interests in over 12,400 multi-family units and 3 million square feet of industrial space, andan opportunistic investment platform which consisted of investments in distressed and under-performing realestate assets and businesses and commercial real estate mortgages and mezzanine loans.39

The charts below present the IFRS Value of our portfolio by asset class and by geographic location as atMarch 31, 2012:IFRS Value by Asset ClassIFRS Value by Geographic LocationOffice (56%)Retail (37%)Multi-Family andIndustrial (1%)OpportunisticInvestments (6%)United States (63%)Australia (18%)Europe (9%)Canada (8%)Brazil (2%)IFRS Value represents equity attributable to parent company and means total assets less total liabilities andnon-controlling interests. For a discussion of IFRS Value see Item 5.A. “Operations and Financial Review andProspects — Performance Measures”. Information regarding the revenues attributable to each of our operatingplatforms and the geographic locations in which we operate is presented in Note 20 and Note 25, respectively, tothe March 31, 2012 unaudited and the December 31, 2011 audited carve-out financial statements of thecommercial property operations of Brookfield Asset Management included elsewhere in this Form 20-F.Our Business StrategyWe invest in well-located real estate assets that generate, or have the potential to generate, long-term,predictable and sustainable cash flows with attractive growth and development potential in some of the world’smost resilient and dynamic markets. We seek to enhance these cash flows through active asset management andour operations-oriented approach. Our properties are located in North America, Europe, Australia and Brazil andwe may pursue growth in other markets where we identify attractive opportunities to build operating platforms oracquire assets and to achieve strong risk-adjusted returns.We strive to invest at attractive valuations, particularly in distress situations that create opportunities forsuperior valuation gains and cash flow returns, or to monetize assets at appropriate times to realize value. At allpoints along the risk-return spectrum, we draw on the resources and local market intelligence of our operatingentities. We believe our strategy will enable us to generate a high level of stable and sustainable cash flows in ourcore properties while allowing us to pursue opportunistic returns by taking advantage of dislocations andinefficiencies in the various real estate markets in which we operate. In executing these strategies, we willleverage our established property platform, our strategic relationship with Brookfield and our large capitalizationto grow our business over time.To execute our strategy, we seek to:• have “best-in-class” operating platforms with high quality real estate assets that are financed withconservative, long-term asset financing, with limited recourse to our company;• maintain a high level of financial liquidity and operational flexibility to be able to capitalize onopportunities to enhance value through acquisitions, development activity and operationalimprovements;• invest where we possess competitive advantages;• acquire assets on a value basis with a goal of maximizing return on capital;• build sustainable cash flows to reduce risk and lower the cost of capital; and40

• recognize that superior returns often require contrarian thinking.Given the size and scope of our business, we believe that we have significant flexibility to source andallocate real estate capital on a global basis and a strong global franchise to generate growth. We are not apassive investor. We plan to grow by acquiring positions of control or influence over the assets in which weinvest using a variety of strategies to target assets directly or through portfolios and corporate entities. We seek tocreate value and reduce the risk profile of portfolio assets through our in-house property management, leasing,brokerage, development and construction capabilities.We expect to be primarily focused on commercial property and have therefore not acquired Brookfield’sresidential land development, home building, construction, real estate advisory services and other similaroperations and services. However, we may pursue acquisitions in those sectors, either as part of commercialproperty acquisitions or on a stand-alone basis, if it would allow us to generate attractive returns.An integral part of our strategy is to pursue acquisitions through consortium arrangements withinstitutional investors, strategic partners or financial sponsors and to form partnerships to pursue acquisitions ona specialized or global basis. Brookfield has a strong track record of leading such consortiums and partnershipsand actively managing underlying assets to improve performance. Brookfield has established and manages anumber of private investment entities, managed accounts, joint ventures, consortiums, partnerships andinvestment funds whose investment objectives include the acquisition of commercial property and Brookfieldmay in the future establish similar funds. We expect to be the lead investor when Brookfield raises its flagshipopportunistic private real estate fund.Competitive StrengthsWe believe that a number of competitive strengths differentiate us from other real property companies.• Global Scale. We are one of the world’s largest publicly-traded commercial property owners.Coupled with Brookfield’s experience, execution abilities and global relationships, our globalpresence should permit us to source and execute large-scale transactions across a wide spectrum ofreal estate sectors and geographies.• Sector and Geographic Diversification. We intend to leverage the size and scope of our operatingplatforms to provide increased revenue diversity and scale, financial strength and capitaldeployment. Because we have interests in office, retail, multi-family and industrial assets in NorthAmerica, Europe, Australia and Brazil, we expect our opportunities to be greater and our revenuestreams to be more stable than if we were focused on a single type of real property or onegeographic region. Our diversification positions us well to pursue growth through development,opportunistic and turn-around strategies and select investments in emerging and high-growthmarkets.• Superior Operating Capabilities. Brookfield’s operating experience and expertise should provide astrong pipeline of deal flow, sourcing capabilities and industry visibility, market-specificunderwriting expertise, and the ability to add value at the property and operations level. As wepursue opportunities in the various markets in which we operate, we will benefit from Brookfield’sexperience in owning, operating and investing in high quality commercial properties, sourcing andstructuring deals with financial and regulatory complexity, executing opportunistic strategies andturnarounds, and employing an operations-oriented approach to adding value by leveraging thestrength of our operating entities.• Stable and Growing Cash Flow. We believe we will have sustainable and growing cash flowwhich will be underpinned by our high quality assets, quality credit tenant base and long term leaseexpiry profile. Our company intends to make quarterly cash distributions in an initial amountcurrently anticipated to be approximately $1.00 per unit on an annualized basis, which initiallyrepresents an estimated dividend yield of approximately 4% of IFRS Value. We will target an41

initial pay-out ratio of approximately 80% of FFO and are initially pursuing a distribution growthrate target in the range of 3% to 5% annually. However, there can be no assurance that we will beable to make distributions in such amounts or meet our target growth rate. Our ability to makedistributions will depend on several factors, some of which are out of our control, including, amongother things, general economic conditions, our results of operations and financial condition, theamount of cash that is generated by our operations and investments, restrictions imposed by theterms of any indebtedness that is incurred to finance our operations and investments or to fundliquidity needs, levels of operating and other expenses, and contingent liabilities.• Brookfield’s Flagship Commercial Property Entity. We will be the primary entity through whichBrookfield Asset Management owns and operates its commercial property businesses on a globalbasis. As such, Brookfield Asset Management has agreed to offer us the opportunity to take-upBrookfield’s share in any investment in commercial property that is suitable for us. We have accessto Brookfield’s private investments through our right to take up Brookfield’s share in them,including investments in opportunistic, real estate finance and property operations in selectemerging markets. Our goal is to have a significant influence or a majority controlling interest ineach of these investments.• Capitalization and Growth. Our significant market capitalization and planned listings on the NYSEand the TSX will provide us with an attractive currency to source and execute large-scaletransactions, typically as the lead investor, across a wide spectrum of real estate sectors andgeographies. We will also seek opportunities to grow our portfolio by re-allocating capital fromstabilized investments to more accretive opportunities where appropriate risk-adjusted returns canbe earned.Development of our BusinessBrookfield and its predecessor companies have been active in various facets of the real estate businesssince the 1920s. Canadian Arena Corporation, the predecessor company to Brookfield Office Properties, built theMontreal Forum in 1924 to provide facilities for hockey and other sporting and cultural events and its earningswere derived principally from the ownership of the Montreal Forum and the Montreal Canadiens of the NationalHockey League until the sale of the hockey franchise in 1978.In 1976, Brookfield expanded its real estate interests by acquiring a controlling interest in one ofCanada’s largest public real estate companies. The steady escalation in commercial property values over the nextten years provided the capital base to expand. Brookfield took advantage of falling real estate values during therecession of the early 1990s to upgrade and expand its directly owned commercial property portfolio. In 2003,Brookfield made its first investments outside of North America by making property investments in the UnitedKingdom. Brookfield further expanded outside of North America in 2007 by making property investments inAustralia.The accumulation of our current portfolio of assets was completed through various corporate and propertypurchases, including the following acquisitions:• BCE Developments – 7 million square feet: In 1990, Brookfield acquired a 50% interest in aportfolio of office properties in Toronto, Denver and Minneapolis from BCE Developments. In1994, this interest was increased to 100%. Brookfield Place, Brookfield’s flagship office complexin Toronto, was acquired in this transaction.• Olympia & York U.S.A. – 14.7 million square feet: In 1996, Brookfield acquired a 46% interest inWorld Financial Properties LP, the corporation formed from the bankruptcy of Olympia & York,which included three of the four towers of the World Financial Center, One Liberty Plaza and 245Park Avenue in Manhattan. Brookfield subsequently increased its interest to 99.4%.42

• Trizec Western Canada – 3.5 million square feet: In 2000, Brookfield acquired a portfolio ofCalgary properties, including the Bankers Hall complex.• United Kingdom – 8.8 million square feet: In 2003, Brookfield acquired a 9% interest in CanaryWharf, marking its entry into the United Kingdom real estate market. Canary Wharf owned andoperated 8.8 million square feet of office and retail properties at that time and had 1 million squarefeet of office space under construction. Brookfield’s interest in Canary Wharf was increased toapproximately 22% in 2010. In 2005, Brookfield also purchased an 80% interest in a 555,000square foot office property at 20 Canada Square, Canary Wharf, London. Brookfield now owns100% of this property. In addition, in 2010, Brookfield acquired a 50% stake in 100 Bishopsgate, adevelopment site in the City of London.• O&Y Properties/O&Y REIT – 11.6 million square feet: In 2005, Brookfield acquired 100% ofO&Y with other partners and continues to own a direct 25% interest in a portfolio of high-qualityoffice properties owned by O&Y Properties and O&Y REIT in Toronto, Ottawa, Calgary andEdmonton with a consortium of investors.• Trizec Properties/Trizec Canada – 26 million square feet: In 2006, Brookfield acquired Trizec’sportfolio of 58 office properties in New York, Washington, D.C., Los Angeles and Houston in ajoint venture with a partner.• Brazil – 2.5 million square feet: In 2007, Brookfield’s retail property fund in Brazil entered into anagreement to acquire five high-quality shopping centers in São Paulo and Rio de Janeiro. Thisacquisition expanded Brookfield’s portfolio to approximately 2.5 million square feet of retailcenters in south-central Brazil.• Australia Portfolio – 6.2 million square feet: In 2007, Brookfield acquired Multiplex Limited andMultiplex Property Trust, or Multiplex, an Australian commercial property owner and developer.Multiplex’s assets included approximately $3.6 billion of core office and retail properties withinnine funds and a $3 billion high-quality office portfolio.• General Growth Properties, Inc. – 160 million square feet: In 2010, Brookfield led therecapitalization of GGP, the second largest mall owner in the United States with 166 malls as atDecember 31, 2011. In 2011, Brookfield acquired an additional 113.3 million common shares ofGGP, giving Brookfield and its consortium partners an approximate 38% equity interest in GGP(Brookfield’s interest is approximately 21%). In January 2012, GGP spun-off Rouse Properties,Inc., or Rouse, which at the time of the spin-off held a portfolio of 30 malls.Since 1989, Brookfield has invested approximately $17.3 billion of equity in commercial property,generating an estimated compound annual return, or IRR, of approximately 15.4% through December 31, 2011.The return represents the composite levered investment return from all of the opportunistic and core entities andinvestments that will be acquired by our company from Brookfield in connection with the spin-off, frominception through December 31, 2011. The IRR reflects the gross internal rate of return before any managementfees but after all property level service fees such as lease fees, development and construction fees and propertymanagement fees. The IRR was determined using the value of Brookfield’s investments in commercial propertyas at December 31, 2011 (which includes valuations of unrealized investments that are based on assumptionsmanagement believes are reasonable as discussed below) compared to the aggregate equity investments made insuch commercial property, and includes all net proceeds generated by these investments.In calculating the IRR, valuations of unrealized investments include assumptions that managementbelieves are fair and reasonable reflecting the fair value exit price that would be received to sell an asset or paidto transfer a liability in an orderly transaction between non-arm’s length market participants at the measurementdate. The December 31, 2011 valuations of unrealized investments reflect the reported fair values under the43

espective accounting regime, which are within the scope of the 2011 year-end financial statement auditconducted by external auditors. To determine the year-end valuations, management assumptions include, but arenot limited to:• projected occupancy rates based on current occupancy, lease renewals and lease-up plans;• projected rental rates based on current rent rolls and anticipated growth based on market activity andlease-up plans;• projected operating expenses based on current expenses, inflation and lease-up plans;• capital expenditures based on age of properties and required upgrades;• appropriate discount rates; and• terminal capitalization rates.The historical performance of Brookfield should not be taken as an indication of performance by ourcompany or Brookfield in the future or of any returns expected on an investment in our units.Operating PlatformsOur business is organized in four operating platforms, with assets as of March 31, 2012 as set forth in thediagram below. The capital invested in these operating platforms is through a combination of: direct investment;investments in asset level partnerships or joint venture arrangements; sponsorship and participation in privateequity funds; and the ownership of shares in other public companies. Combining both publicly-listed and privateinstitutional capital provides a competitive advantage in flexibility and access to capital to fund growth.BROOKFIELD PROPERTYPARTNERSOffice$35 billion of assets undermanagement124 properes82 million sq. .18 million sq. . developmentpipelineRetail$35 billion of assets undermanagement182 properes164 million sq. .$350 million redevelopmentpipelineMulti-Family &Industrial$1 billion of assets undermanagement12,400 mul-family units3 million sq. . industrial spaceOpportunisticInvestments$3 billion of assets undermanagement11 million sq. . office spaceand other assets44

As at the dates set out below, we held our commercial property operations through our interests in theentities and groups of assets set out below.Operations March 31, 2012 December 31, 2011 December 31, 2010 December 31, 2009OfficeBrookfield Office Properties Inc. (1) 50% 50% 50% 50%Interest in Australia (2) 100% 100% 100% 100%Europe 100% 100% 100% 100%Canary Wharf Group plc 22% 22% 22% 15%RetailGeneral Growth Properties, Inc. (3) 21% 21% 8% -Rouse Properties, Inc. (4) 37% - - -Brazil Retail Fund 35% 35% 25% 25%Interest in Australia 100% 100% 100% 100%Europe - - 100% 100%Multi-Family & Industrial (5)Multi-Family (through various funds) 10%-52% 10%-52% 29%-52% 29%-52%Industrial (through various funds) 29%-41% 29% - -Opportunistic Investments (5)Opportunity Funds 29%-82% 29%-82% 29%-82% 29%-82%Finance Funds 13%-33% 25%-33% 28%-33% 28%-33%(1) Our interest in Brookfield Office Properties is comprised of 49.6% of the outstanding common shares and 97.1% of the outstandingvoting preferred shares. Brookfield Office Properties owns an approximate 83.3% aggregate equity interest in Brookfield Canada OfficeProperties, a Canadian real estate investment trust that is listed on the TSX and the NYSE, and an approximate 84.3% interest in the U.S.Office Fund, which consists of a consortium of institutional investors and which is led and managed by Brookfield Office Properties.(2) Our Australian office platform consists of our economic interest in certain of our Australian office properties not held through BrookfieldOffice Properties.(3) Our interest in GGP is comprised of an economic interest in approximately 21% (38% with our consortium partners) of the outstandingshares of common stock (assuming the exercise of all outstanding warrants to acquire additional shares of common stock, which warrantswere “in-the-money” as at March 31, 2012).(4) Rouse is a newly formed NYSE-listed company that GGP spun-out to its shareholders on January 12, 2012. As of March 2012, we hadinterest of approximately 37% (54% with our consortium partners) of the outstanding shares of common stock.(5) Our economic interest set forth in the table above is reflected as a range because we hold certain of our multi-family and industrial andopportunistic investment assets through a combination of different funds in which we hold varying economic interests.Office PlatformOur strategy for our office platform includes:• Growing our high quality portfolio. We are continuing to grow our high quality office portfolio ingateway cities. We seek to build a diversified global presence by targeting markets primarilyunderpinned by major financial, energy and professional services businesses in key urban centers inNorth America, Australia, and Europe. Our goal is to maintain a meaningful presence in each of ourprimary markets in order to maximize the value of our tenant relationships.• Optimizing rental revenues. In order to ensure the long-term sustainability of rental revenuesthrough economic cycles, we seek to continue to attract tenants with strong credit quality, maintainhigh occupancy levels through proactive leasing initiatives across our portfolio and initiatemark-to-market opportunities on leases.• Adding value through development. We seek to add value across our portfolio by enhancingexisting portfolio properties through major capital projects on a selective basis and by creating“best-in-class” new office stock in premium locations through development initiatives.• Utilizing a prudent capital structure. We seek to generate strong risk-adjusted returns by utilizingconservative financing structures while pursuing liquidity initiatives across our portfolio.45

As at March 31, 2012, our office portfolio consisted of interests in 124 properties containingapproximately 82 million square feet of commercial office space. The majority of these properties are located inthe central business districts of New York, Washington, D.C., Houston, Los Angeles, Toronto, Calgary, Ottawa,Sydney, Melbourne, Perth and London, making us a global leader in the ownership and management of highqualityoffice assets. Landmark properties include the World Financial Center in New York, Brookfield Place inToronto, Bank of America Plaza in Los Angeles, Bankers Hall in Calgary, Darling Park in Sydney andBrookfield Place (formerly City Square) in Perth.The following is a brief overview of the office property assets in our portfolio and the office propertymarkets in which we operate as at March 31, 2012:Number ofProperties (1)Total Area (000’sSq. Ft.)Average MarketOccupancy Rate(%)Our AverageOccupancy Rate(%)Market Net Rent($/Sq. Ft.)Average InplaceNet Rent($/Sq. Ft.)United States 62 49,307 89.0 91.0 31.33 24.76Canada 28 20,785 95.2 96.8 31.34 26.06Australia 33 10,993 92.6 97.4 52.56 52.22Europe (2) 1 576 94.6 100.0 57.38 61.13Total/Average 124 81,661 91.1 93.3 34.50 29.38(1) Does not include office assets held within our opportunistic investment platform.(2) Does not include office assets held through our approximate 22% interest in Canary Wharf.The table below presents the following information on the assets in our office platform by geographiclocation as at March 31, 2012: (i) the number of properties, the percentage of the space under lease and the sizeof the office, retail, leasable, parking and total space in our office portfolio, which provides information as if weown 100% of the office assets in which we have an interest; (ii) our proportionate interest in those office assetsbefore considering minority interests; and (iii) our proportionate interest in those office assets net of minorityinterests. We believe information presented as if we own 100% of each of the properties provides an appropriatebasis on which to evaluate the performance of properties in the portfolio relative to each other and to otherproperties in the market. Our proportionate interests in the investments demonstrate our ability to manage theunderlying economics of the relevant investments, including the financial performance and cash flows.Proportionate interest in the assets net of minority interests represents our economic interest in the underlyingproperty and is relevant because it represents the net assets and operations of the underlying property that wemanage that are directly attributable to us.46

Office Property Portfolio (1) Assets Under Management Proportionate (2) Interests (3)ProportionateNet of Minority(000’s Sq. Ft.)Number ofPropertiesLeased% Office Retail Leasable Parking TotalOwned% Leasable Total Leasable TotalU.S. PropertiesNew York 10 93.9% 18,345 559 18,904 282 19,186 86% 16,272 16,553 8,094 8,233Boston 1 63.9% 771 25 796 235 1,031 100% 796 1,031 395 511Washington, D.C. 30 90.1% 5,969 535 6,504 1,029 7,533 82% 5,390 6,193 2,867 3,351Los Angeles 6 84.1% 4,106 424 4,530 1,156 5,686 81% 3,658 4,597 1,830 2,299Houston 9 88.2% 7,872 291 8,163 1,509 9,672 74% 6,190 7,138 3,090 3,564Denver 2 98.1% 2,597 48 2,645 503 3,148 80% 2,000 2,503 1,001 1,253Minneapolis 4 93.9% 1,718 812 2,530 521 3,051 100% 2,530 3,051 1,265 1,52662 91.0% 41,378 2,694 44,072 5,235 49,307 83% 36,836 41,066 18,542 20,737Canadian PropertiesToronto 12 94.4% 7,995 764 8,759 1,789 10,548 65% 5,690 6,868 2,377 2,908Calgary 8 99.8% 5,340 300 5,640 896 6,536 50% 2,820 3,268 1,184 1,372Ottawa 6 99.7% 1,708 37 1,745 1,030 2,775 25% 436 694 184 293Vancouver 1 97.3% 493 95 588 265 853 100% 588 853 246 355Other 1 100.0% 70 3 73 – 73 100% 73 73 36 3628 96.8% 15,606 1,199 16,805 3,980 20,785 57% 9,607 11,756 4,027 4,964Australian PropertiesSydney 16 98.3% 4,655 432 5,087 492 5,579 59% 2,984 3,278 1,923 2,118Melbourne 3 98.1% 2,005 67 2,072 239 2,311 80% 1,671 1,849 774 859Brisbane 3 93.9% 820 6 826 60 886 87% 717 770 717 770Perth 2 96.0% 597 15 612 31 643 84% 516 540 335 351Canberra 1 100.0% 176 – 176 28 204 100% 176 203 176 203New Zealand 8 94.8% 1,156 35 1,191 179 1,370 100% 1,191 1,370 596 68533 97.4% 9,409 555 9,964 1,029 10,993 73% 7,255 8,010 4,521 4,986European PropertiesLondon 1 100.0% 539 17 556 20 576 100% 556 576 556 5761 100.0% 539 17 556 20 576 100% 556 576 556 576Total Office Properties 124 93.3% 66,932 4,465 71,397 10,264 81,661 75% 54,254 61,408 27,646 31,263(1) Does not include office assets held within our opportunistic investment platform or our approximate 22% interest in Canary Wharf.(2) Reflects our company’s interest before considering minority interests, including minority interests in the Property Partnership,Brookfield Office Properties, Brookfield Canada Office Properties, the U.S. Office Fund, Brookfield Prime Property Fund, BrookfieldHeritage Partners LLC, Multiplex New Zealand Property Fund, and Brookfield Financial Partners L.P.(3) Reflects our company’s interest net of minority interests described in the note above other than the minority interest in the PropertyPartnership.47

An important characteristic of our office portfolio is the strong credit quality of our tenants. We directspecial attention to tenant credit quality in order to ensure the long-term sustainability of rental revenues througheconomic cycles. The following list shows major tenants with over one million square feet of space in our officeportfolio by leased area and their respective credit ratings and lease commitments as at March 31, 2012:TenantPrimary LocationCreditRating (1)Year ofExpiry (2)Total(000’sSq. Ft.)Various Government Agencies All markets AA+/AAA Various 5,985 8.4%Bank of America/Merrill Lynch (3) Toronto/New York/Denver/Los Angeles A/A- Various 4,976 7.0%Wells Fargo/Wachovia Securities (4) New York A+ 2019 1,545 2.2%CIBC World Markets (5) Toronto/New York/Calgary A+ 2033 1,436 2.0%Suncor Energy Calgary BBB+ 2028 1,352 1.9%Century Link Denver Not Rated 2017 1,278 1.8%Kellogg Brown & Root Houston Not Rated 2030 1,268 1.8%Royal Bank of CanadaVancouver/Toronto/Calgary/New York/Los Angeles/Minneapolis AA- 2023 1,259 1.8%Bank of Montreal Calgary/Toronto A+ 2024 1,143 1.6%Total 20,242 28.5%(1) From Standard & Poor’s Rating Services, Moody’s Investment Services, Inc. or DBRS Limited. Reflects credit rating of tenant anddoes not reflect credit rating of any subtenants.(2) Reflects the year of maturity related to lease(s) beyond 2016 and is calculated for multiple leases on a weighted average basis based onsquare feet where practicable.(3) Bank of America/Merrill Lynch leases 4.6 million square feet in the World Financial Center, of which they occupy 2.7 million squarefeet with the balance being leased to various subtenants ranging in size up to 500,000 square feet. Of this 2.7 million square feet, 1.9million is in 4 World Financial Center, and 0.8 million square feet is in 2 World Financial Center. Of the total leased space, 3.4 millionsquare feet will expire in 2013.(4) Wells Fargo/Wachovia Securities leases 1.4 million square feet at One New York Plaza, of which they occupy 148,000 square feetwith the balance being leased to five subtenants ranging in size up to 756,000 square feet.(5) CIBC World Markets leases 1,094,000 square feet at 300 Madison Avenue in New York, of which they sublease 925,000 square feetto PricewaterhouseCoopers LLP.Sq. Ft.(%)48

Our strategy is to sign long-term leases in order to mitigate risk, reduce our overall re-tenanting costs andensure stable and sustainable cash flows. We typically commence discussions with tenants regarding their spacerequirements well in advance of the contractual expiration.The following table presents the lease expiry profile of our office properties with the associated expiringaverage in-place net rents by region at March 31, 2012:(000’s sq. ft.)Net RentalAreaCurrentlyAvailable(000’ssq.ft.)Expiring Leases2012 2013 2014 2015 2016 2017NetRent (000’s Netsq.ft.) Rent (000’s Netsq.ft.) Rent (000’s Netsq.ft.) Rent (000’s Netsq.ft.) Rent (000’ssq.ft.)2018 &BeyondNetRent (000’ssq.ft.)United States 44,071 3,961 2,324 $18 5,631 $31 3,224 $23 2,717 $22 2,054 $25 2,052 $25 22,108 $33Canada 16,806 534 320 28 1,771 23 391 31 1,626 25 1,752 26 586 30 9,826 31Australia 9,965 259 361 53 659 43 880 54 1,183 61 1,078 65 1,050 51 4,495 72Europe (1) 556 - - - - - 262 60 - - - - - - 294 63Total 71,398 4,754 3,005 $23 8,061 $30 4,757 $31 5,526 $31 4,884 $34 3,688 $33 36,723 $37Percentage of Total 100.0% 6.7% 4.2% 11.3% 6.7% 7.7% 6.8% 5.2% 51.4%(1) Does not include office assets held through interest in Canary Wharf.(US$)The following table summarizes our leasing activity from December 31, 2011 to March 31, 2012:Dec. 31, 2011 Mar. 31, 2012Year One Average Acq.Total ExpiringLeasing Leasing (Disp.) LeasableLeased (1) Expiries Net Rent Leasing Net Rent Net Rent Additions Area(000’s (000’s ($ per (000’s ($ per ($ per (000’s (000’sSq.Ft.) Sq. Ft.) Sq.Ft.) Sq.Ft.) Sq.Ft.) Sq.Ft.) Sq.Ft.) Sq. Ft.)LeasableArea (1)(000’sSq.Ft.)NetRentLeased(000’sSq. Ft.)United States 44,019 40,168 (1,840) $18.81 1,782 $22.07 $26.46 - 44,071 40,110Canada 17,108 16,469 (245) 26.43 341 29.55 30.48 (293) 16,806 16,272Australia 10,166 9,819 (86) 37.76 175 41.52 46.56 (202) 9,965 9,706Europe 556 556 - - - - - - 556 556Total 71,849 67,012 (2,171) $20.42 2,298 $24.66 $28.59 (495) 71,398 66,644(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.As at March 31, 2012, we hold interests in centrally located office development sites with a totaldevelopment pipeline of approximately 18 million square feet in the United States, Canada, Australia andEurope. We classify our office development sites into two categories: (i) active development and (ii) planning.The only active development in our office segment is Brookfield Place (formerly City Square) in Perth, a926,000 square foot development which achieved practical completion on May 18, 2012 for a total cost of A$945million, or A$1,020/square foot.The remaining 17 million square feet in our office development pipeline are at varying points of planning.Included in our pipeline are the development rights to Manhattan West in New York City and 100 Bishopsgate inLondon, U.K. The development rights to Manhattan West, located on Ninth Avenue between 31st Street and 33rdStreet in New York City, include 5.4 million square feet of commercial office space entitlements. We arecommencing work to build the necessary foundations to position this site to be one of the first sites for officedevelopment in Manhattan in the next development cycle. We also hold an interest in 100 Bishopsgate, a wellpositioneddevelopment site in London, U.K., and have begun to prepare the site for construction. With all ourdevelopment sites, we will proceed with developing these sites when our risk adjusted return hurdles andpreleasing targets are met. Until such time as these criteria is met, we are not able to estimate anticipatedcompletion dates and costs.49

The following table summarizes all office development projects in our portfolio by geographic location asat March 31, 2012.(000’s Sq. Ft.)Number of Sites Owned Interest (%) TotalAtOwnershipUnited States 7 95 9,657 9,197Canada 5 78 4,227 3,301Australia 5 100 2,677 2,677Europe 1 50 950 475Total 18 89 17,511 15,650Retail PlatformOur strategy for our retail platform includes:• Growing our high quality portfolio. We are continuing to grow our high quality retail portfolio byfocusing on growth areas in dynamic and resilient markets where we have a significant presencethat we believe are under-served by quality retail centers. We also redevelop our retail properties ona selective basis to enhance our portfolio when we believe a market is ready and appropriate riskadjustedreturns can be earned. We look to maintain a meaningful presence in each of our primarymarkets in order to maximize the value of our tenant relationships.• Positioning malls as the “only” or “best” mall in town. We seek to position our malls as the“only” or “best” mall in their market areas in order to concentrate consumer traffic and capturefavorable demographic trends. We aim to do this by creating malls as irreplaceable destinationswithin the community.• Optimizing occupancy and enhance income. In order to optimize occupancy levels, we look forways to increase tenant sales per square foot and lease spreads while decreasing our occupancycosts. We also seek to diversify the tenants at our malls across retail sectors in order to achievecomplementary retail mixes. We continue to pursue alternative income streams through parking,merchandising and other initiatives at our malls, while assessing cost efficiencies and synergiesacross our retail portfolio.• Actively managing our portfolio capital structures. We intend to achieve our goal of protectingand creating growth in the value of our retail portfolio by actively managing capital structures andconservatively financing assets.Our retail portfolio consists of high quality retail centers in target markets predominantly in the UnitedStates, Brazil and Australia. As at March 31, 2012, our retail portfolio consisted of interests in 182 well-locatedhigh quality retail properties encompassing approximately 164 million square feet of retail space.As at March 31, 2012, our retail portfolio consisted of 166 regional malls totaling approximately158 million square feet in major and middle markets throughout the United States with the concentration of ourregional malls as a percentage of our total regional mall gross leasable area allocated as follows: west region(26%), southeast region (23%), midwest region (21%), northeast region (16%) and southwest region (14%). Webelieve 24 regional malls in our retail portfolio are the premier regional malls in their market areas whenmeasured against the top 100 leading malls in the United States. These high quality regional malls typically haveaverage annual tenant sales per square foot of $725 or higher. Regional malls in our portfolio include Ala Moanain Honolulu, Fashion Show in Las Vegas, the Natick Collection in Natick (Boston), Tysons Galleria inWashington, D.C., Park Meadows in Lone Tree (Denver) and Water Tower Place in Chicago. More broadly, weown an interest in 125 of the top 600 regional malls in the country. A significant number of these regional mallsare either the only mall in their market area, or, as part of a cluster of malls, receive relatively high consumertraffic.50

Our portfolio also includes, as at March 31, 2012, 8 malls totaling approximately 3 million square feet inBrazil, 59% of which is located in São Paolo, 33% of which is located in Rio de Janeiro and 8% of which islocated in Belo Horizonte. These properties are mostly concentrated in premier locations in highly dense urbanareas and thereby have leading positions in their respective trade areas. Our core properties include the Rio SulShopping Center in Rio de Janeiro and the Shopping Pátio Paulista and Shopping Pátio Higienópolis in SãoPaulo.In Australia, as at March 31, 2012, our portfolio consists of an economic interest in 8 retail centerstotaling approximately 3 million square feet, 46% of which is located in Sydney, 31% of which is located in NewZealand and 23% of which is located in Brisbane.The following is a brief overview of the retail property assets in our portfolio and the retail propertymarkets in which we operate as at March 31, 2012:Number ofPropertiesGross LeasableArea (000’sSq. Ft.)Occupancy Rate(%)Average AnnualTenant Sales($/Sq. Ft.) (1)Average In-PlaceRent($/Sq. Ft.)United States (2) 166 158,007 92.2 486 56.67Brazil 8 2,786 96.9 804 53.25Australia (3) 8 2,892 98.7 505 12.15Total/Average 182 163,685 92.7 492 54.81(1) Based only on properties with respect to which tenants are contractually obligated to report this information.(2) Includes only U.S. regional malls.(3) Includes three industrial properties totaling approximately 2.1 million square feet.51

The table below presents the following information on the assets in our retail platform by geographiclocation as at March 31, 2012: (i) the number of properties, the percentage of the space under lease and the sizeof the office, retail, leasable, parking and total space in our retail portfolio, which provides information as if weown 100% of the retail assets in which we have an interest; (ii) our proportionate interest in those retail assetsbefore considering minority interests; and (iii) our proportionate interest in those retail assets net of minorityinterests. We believe information presented as if we own 100% of each of the properties provides an appropriatebasis on which to evaluate the performance of properties in the portfolio relative to each other and to otherproperties in the market. Our proportionate interests in the investments demonstrate our ability to manage theunderlying economics of the relevant investments, including the financial performance and cash flows.Proportionate interest in the assets net of minority interests represents our economic interest in the underlyingproperty and is relevant because it represents the net assets and operations of the underlying property that wemanage that are directly attributable to us.Retail Property Portfolio (1) Assets Under Management Proportionate (2) Interest (3)ProportionateNet of Minority(000’s Sq. Ft.)Number of LeasedProperties % Office Retail Leasable Parking TotalOwned% Leasable Total Leasable TotalU.S. PropertiesMidwest Region 35 91.2% 731 32,190 32,921 – 32,921 89% 29,258 29,258 6,572 6,572Northeast Region 27 92.3% 714 25,202 25,916 – 25,916 83% 21,420 21,420 4,198 4,198Southeast Region 37 91.9% 363 36,484 36,847 – 36,847 86% 31,596 31,596 6,520 6,520Southwest Region 20 97.2% 109 21,465 21,574 – 21,574 89% 19,165 19,165 4,335 4,335West Region 47 90.6% 968 39,781 40,749 – 40,749 89% 36,367 36,367 8,430 8,430166 92.2% 2,885 155,122 158,007 – 158,007 87% 137,806 137,806 30,056 30,056Brazilian PropertiesRio de Janeiro 2 96.1% – 922 922 – 922 74% 679 679 192 192São Paulo 5 97.1% – 1,638 1,638 – 1,638 48% 786 786 139 139Belo Horizonte 1 100.0% – 226 226 – 226 50% 113 113 20 208 96.9% – 2,786 2,786 – 2,786 57% 1,578 1,578 351 351Australian PropertiesSydney 4 97.1% 18 1,161 1,179 139 1,318 100% 1,179 1,318 1,179 1,318Brisbane 2 99.7% – 586 586 88 674 100% 586 674 586 674New Zealand 2 100.0% – 900 900 – 900 100% 900 900 450 4508 98.7% 18 2,647 2,665 227 2,892 100% 2,665 2,892 2,215 2,442Total Retail Properties 182 92.7% 2,903 160,555 163,458 227 163,685 87% 142,049 142,276 32,622 32,849(1) Does not include retail assets held within our opportunistic investment platform or the retail assets held by GGP outside of the UnitedStates and non-regional malls.(2) Reflects our company’s interest before considering minority interests, including minority interests in the Property Partnership, GGP,Brazil Retail Fund and Multiplex New Zealand Property Fund.(3) Reflects our company’s interest net of minority interests described in the note above other than the minority interest in the PropertyPartnership.52

The following table presents the lease expiry profile of our retail properties with the associated averageexpiring in-place rents by region at March 31, 2012:(000’s sq. ft.)NetRentalAreaCurrentlyAvailable (000’ssq.ft.)Expiring Leases2012 2013 2014 2015 2016 2017InplaceRent (000’ssq.ft.)InplaceRent (000’ssq.ft.)InplaceRent (000’ssq.ft.)InplaceRent (000’ssq.ft.)InplaceRent (000’ssq.ft.)InplaceRent2018 &Beyond(000’ssq.ft.)United States (1) 61,929 4,818 3,759 $58 6,077 $54 6,308 $ 54 5,718 $61 5,815 $65 5,707 $66 23,727 $59Australia 2,664 36 26 51 23 40 31 44 122 29 729 11 344 18 1,354 13Brazil 2,786 85 728 52 338 47 294 104 405 75 241 78 118 25 577 15Total 67,379 4,939 4,513 $57 6,438 $54 6,633 $ 56 6,245 $61 6,785 $60 6,169 $63 25,658 $56Percentage of Total 100.0% 7.3% 6.7% 9.6% 9.8% 9.3% 10.1% 9.2% 38.0%(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.(US $)The following table summarizes our leasing activity from December 31, 2011 to March 31, 2012:Dec. 31, 2011 Mar. 31, 2012YearOne Average Acq.Total ExpiringLeasing Leasing (Disp.) LeasableLeased (1) Expiries Rent Leasing Rent Rent Additions Area(000’s (000’s ($ per (000’s ($ per ($ per (000’s (000’sSq.Ft.) Sq. Ft.) Sq.Ft.) Sq. Ft.) Sq.Ft.) Sq.Ft.) Sq. Ft.) Sq. Ft.)LeasableArea (1)(000’sSq.Ft.)InplaceRentLeased(000’sSq.Ft.)United States 66,369 62,158 (5,579) $56.68 4,972 $54.86 $59.99 578 66,947 62,129Australia 2,744 2,689 - - - - - (80) 2,664 2,628Brazil 3,069 2,905 (22) 45.95 101 29.23 30.41 (283) 2,786 2,701Total 72,182 67,752 (5,601) $56.64 5,073 $54.35 $59.40 215 72,397 67,458(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.The following list reflects the ten largest tenants in our retail portfolio as at March 31, 2012. The largesttenant in our portfolio accounted for approximately 2.6% of minimum rents, tenant recoveries and other.Top Ten Largest TenantsPrimary DBAPercent ofMinimumRents,TenantRecoveriesand Other(%)Total(000’sSq.Ft.)NumberofLocationsLimited Brands, Inc. Victoria’s Secret, Bath & Body Works, PINK 2.6% 1,771 306Foot Locker, Inc. Foot Locker, Champs Sports, Footaction USA 2.6% 1,444 363The Gap, Inc. Gap, Banana Republic, Old Navy 2.5% 2,372 227Abercrombie & Fitch Stores, Inc.Abercrombie, Abercrombie & Fitch, Hollister,Gilly Hicks 1.9% 1,409 199Forever 21, Inc. Forever 21 1.8% 2,265 107Golden Gate Capital Express, J. Jill, Eddie Bauer 1.4% 1,183 144American Eagle Outfitters, Inc. American Eagle, Aerie, Martin + Osa 1.5% 921 162Luxottica Retail North America Inc. Lenscrafters, Sunglass Hut, Pearle Vision 1.4% 581 289Macy’s Inc. Macy’s, Bloomingdale’s 1.1% 20,881 135Genesco Inc.Journeys, Lids, Underground Station, Johnston& Murphy 1.1% 543 356Total 17.9% 33,370 2,288We develop and redevelop retail properties on a selective basis to enhance our portfolio when we believerisk-adjusted returns can be earned. As of March 31, 2012, the total anticipated costs of these redevelopmentprojects were estimated to be approximately $350 million. We are currently redeveloping two consolidated53

properties within our Brazil Retail Fund, the 54,000 square foot Patio Paulista Mall and the 91,000 square footRio Sul mall, for a total planned cost of approximately $60 million. Those redevelopment projects are expectedto be completed in 2012 and 2013, respectively. As of March 31, 2012, we have incurred costs of approximately$40 million in connection with these redevelopment projects.In addition, we continue to evaluate a number of other redevelopment prospects primarily within our retailequity accounted investments to further enhance the quality of our assets in future periods. Total planned costs ofthese remaining projects are approximately $290 million. Planning for these redevelopment projects is in thepreliminary phase. Additional details on the properties to be redeveloped and anticipated completion dates willbe available as the planning progresses.In the year ended December 31, 2011, we completed three redevelopment projects in Brazil at the RoposoShopping Mall, Patio Higienopolis Mall, and Patio Paulista Mall. Collectively, these projects accounted for184,000 square feet of redeveloped retail space and were completed at a cost of approximately $90 million. Thefair value of these properties of $166 million was reclassified from development properties to commercialproperties upon the completion of the redevelopment in the year ended December 31, 2011. Our company did notcomplete any developments in the year ended December 31, 2010.Multi-Family and Industrial PlatformOur strategy for our multi-family and industrial platform includes:• Targeting under-performing properties. We focus on acquiring multi-family properties anddeveloping industrial properties in high growth, supply-constrained markets by selectively targetingproperties that we believe are under-valued, neglected or under-performing.• Leveraging our strategic relationships:We are seeking to leverage the deep sourcing and operating capabilities of Fairfield ResidentialCompany LLC, or Fairfield, for our future investments in multi-family properties. Fairfield, whichis 65% owned by Brookfield, is one of the largest vertically-integrated multi-family real estatecompanies in the United States and is a leading provider of acquisition, development, construction,renovation and property management services.In early 2012, Brookfield entered into a joint venture with an industrial partner for the acquisitionof industrial properties in the United States, which we believe will provide us with access toinvestment opportunities and enable us to leverage our partner’s operating capabilities. Our partnerhas a fully-integrated, national platform and owns or manages 30 million square feet of industrialwarehouse property and controls one of the largest industrial land banks in the United States.• Enhancing revenues. We seek to leverage our experience and that of our partners in propertymanagement services to enhance revenues at our multi-family and industrial properties by growingrents and improving operational efficiencies, with the goal of generating stable but growing rentalrevenue. We also seek to create value by enhancing our multi-family portfolio through renovationprograms and marketing initiatives and selectively developing industrial assets.• Positioning portfolios for institutional ownership. Our goal is to position our multi-family andindustrial portfolios for institutional ownership. For our multi-family properties, we seek to do thisby stabilizing and minimizing the risk profile of our multi-family portfolio. For our industrialproperties, we typically seek to do this by aggregating single property, development or complicatedportfolio acquisitions into portfolios suitable for institutional ownership through a combination ofproactive leasing, marketing and financing initiatives.As of March 31, 2012, we owned an interest in over 12,400 multi-family units located in coastal and selectinterior markets in North America, a portion of which are managed by Fairfield. Our focus is on multi-family54

properties that we believe have significant value-enhancement potential through the application of dedicatedhands-on asset management and operational expertise. As of March 31, 2012, we owned interests in severalindustrial properties in the United States consisting of approximately 3 million square feet of industrial space. As ofMarch 31, 2012, our multi-family and industrial platform represented approximately 1% of our total IFRS Value.Opportunistic Investment PlatformOur strategy for our opportunistic investment platform includes:• Pursuing an opportunistic investment strategy. We invest in assets with a view to maximizinglong-term, risk-adjusted return on capital by pursuing an opportunistic strategy to take advantage ofdislocations and inefficiencies at all stages of the investment cycle. We seek to acquire positions ofcontrol or influence in individual properties, real estate holding companies and distressed loans,with a focus on large, complex, platform acquisitions, which we believe Brookfield is uniquelypositioned to source and execute.• Providing strong sponsorship. We invest in opportunities that we believe leverage Brookfield’scompetitive strengths, such as deal sourcing, financial or restructuring expertise or operationaladvantages. Our opportunistic investment platform makes investments primarily in Brookfieldsponsoredreal estate opportunity and finance funds. We expect to be the lead investor whenBrookfield raises its flagship opportunistic private real estate fund. We believe that these fundsprovide a significant growth platform for us to participate in large-scale, opportunistic transactionsalongside private institutional partners by providing us with access to transactions with thepotential for significant returns. We hold the largest limited partner interest in almost all of thefunds in which we are invested, and we expect that we will typically be the lead investor in thesefunds in the future. See Item 7.B. “Major Shareholders and Related Party Transactions — RelatedParty Transactions — Relationship with Brookfield”.• Providing operating excellence. We seek to create long-term value by building long-termsustainable revenues and stabilizing assets through operational, financial structuring and otherimprovements in our portfolio assets.• Diversifying geographically. We seek to build a diversified portfolio of real estate assets inemerging and growth markets by targeting global opportunities where we believe a market offersattractive risk-adjusted returns. Initiatives underway include opportunistic acquisitions of largescale,distressed corporate platforms and non-performing loan portfolios in the United States,Europe and Australia, office development opportunities in Brazil, distressed and developmentopportunities in the Middle East and local real estate investment strategies in India.Our opportunistic investment platform pursues opportunistic investments predominantly in distressed andunder-performing real estate assets and businesses and in commercial real estate mortgages and mezzanine loans.As of March 31, 2012, we held interests in a diverse portfolio of funds with approximately $1.8 billion ofinvested fund capital. Through these funds, we have interests in approximately 11 million square feet of officespace, mezzanine loans and other real estate assets located in North America, Europe, Australia, Brazil andemerging markets. Depending on the nature of our investment and the specifics of the underlying assets, we mayseek to hold and/or enhance the assets we invest in or sell the assets in order to realize a return on our investment.Once an asset has been sufficiently developed and its risk profile stabilized, we may determine to hold the assetthrough our office, retail, or multi-family and industrial platform as a long-term, stable investment.As at March 31, 2012, our investments in opportunity funds, which primarily invest in distressed andunderperforming real estate assets and businesses, had an IFRS Value of approximately $385 million, and ourinvestments in finance funds, which primarily invest in commercial real estate mortgages and mezzanine loans,55

had an IFRS Value of approximately $380 million. As of March 31, 2012, our opportunistic investment platformrepresented approximately 6% of our total IFRS Value.Market Overview and OpportunitiesWe believe that we are well-positioned to take advantage of attractive investment conditions in the keyregions in which we have operations. We believe that the current volatility in global capital markets will providecompelling investment opportunities, as well as reinforce the benefits of our investment focus on high qualityreal estate assets with conservative financing that generate, or have the potential to generate, long-term,predictable and sustainable cash flows.Capital preservation and risk mitigation remain key tenets of our investment philosophy – in everyinvestment and in every economic environment. We believe the next few years will present some very attractiveopportunities for real estate investors as economic conditions around the world recover and capital marketsstabilize. We believe our company offers an attractive opportunity to participate in these markets by establishinga group of properties that produce significant cash flow for distribution to our unitholders and for the accretiveacquisition and development of high-quality assets.The following is an overview of the real estate industry in each of our primary markets.North AmericaSupply and demand fundamentals remain sound in core markets for core assets and we continue to seestrong investment demand for well-located, high quality assets. We believe the ability to add value throughleasing and property management of under-performing real estate assets in core markets will continue to be a keycompetitive advantage in these economic conditions.Further, we continue to see distressed situations requiring new capital and strong sponsorship, especiallyin the United States. These opportunities are coming directly from banks, private entities facing looming debtmaturities and lower asset values, the unwinding of dysfunctional partnerships, operators seeking new growthcapital, and deleveraging initiatives, among others. While the regulatory and policy approach in the United Stateshas not been as rigid as Europe’s, we believe the large upcoming debt maturity profile of the United Statesthrough 2017 and pool of distressed assets requiring recapitalization in the United States will continue to provideopportunities.EuropeSovereign debt issues are continuing to put significant pressure on macroeconomic conditions and capitalmarkets. Europe currently has the largest debt funding gap in the world, and we believe that this, combined withthe impact of austerity measures, will provide ample opportunities to acquire groups of assets in various assetclasses across Europe in the next few years. Industry sources currently estimate a €400 to €700 billion fundinggap in European real estate assets. New government regulations will force banks under government ownership todivest portions of their real estate by 2014 – 2015. We believe that this, combined with the introduction of newfund regulations, will provide further consolidation and rationalization of real estate ownership.Our European focus remains on the continent’s largest markets, including the United Kingdom, France,Germany and Spain, across various asset classes.AustraliaOur primary focus in Australia remains on the office sector, in which we already have a platform and alsosee the largest opportunities. The office market is still in the early stages of recovery, driven by growth in the56

domestic economy and overall low unemployment rates. Supply is limited, boding well for robust rental andcapital growth over the medium term, and we believe demand fundamentals remain strong in the major markets.Banks are seeking to reduce exposure to troubled real estate assets, resulting in asset sales and alternative debtfunding opportunities are emerging as a result.Our Australian portfolio also includes assets in New Zealand, where our primary focus remains on theoffice sector, in which we already have a platform and see acquisition and value-add opportunities. The primaryoffice market of Auckland is in the early stages of recovery with increasing leasing enquiry and positive netabsorption. There remains a large volume of distressed land throughout New Zealand, and banks are releasingsome assets into receivership/sale in a controlled manner presenting opportunities for alternative debt funding.BrazilAs with other emerging markets, Brazil fared materially better than many developed countries during therecession, however, while we believe that the demographic changes occurring in the region fuelled by a burgeoningmiddle class will continue to drive growth, we expect the return set in the near-term to be less opportunistic.We remain focused on the retail and office segments. Retail fundamentals continue to improvethroughout the country, driven by the low unemployment rates and increasing household income. Retail salesgrowth remains strong. National shopping center penetration levels are still low when compared to internationallevels, especially outside the main capitals. The office sector continues to post strong absorption levels, as theinflux of multinational companies and continued relocation of tenants from older dysfunctional assets to newmodern structures is driving demand. Both Rio de Janeiro and São Paulo remain at historic lows for vacancy. InBrazil, given that real estate operators are heavily reliant on the public markets for capital to execute businessplans, we believe there could be substantial opportunities for private capital, especially with volatility in theBrazilian stock market.Competition and MarketingThe nature and extent of competition we face varies from property to property and platform to platform.Our direct competitors include other publicly-traded office, retail, multi-family and industrial development andoperating companies, private real estate companies and funds, commercial property developers and other ownersof real estate that engage in similar businesses.We believe the principal factors that our tenants consider in making their leasing decisions include: rentalrates; quality, design and location of properties; total number and geographic distribution of properties;management and operational expertise; and financial position of the landlord. Based on these criteria, we believethat the size and scope of our operating platforms, as well as the overall quality and attractiveness of ourindividual properties, enable us to compete effectively for tenants in our local markets. Our marketing effortsfocus on emphasizing these competitive advantages and leveraging our relationship with Brookfield. We benefitfrom using the “Brookfield” name and the Brookfield logo in connection with our marketing activities asBrookfield has a strong reputation in the global real estate industry.Intellectual PropertyOur company and the Property Partnership have each entered into a licensing agreement with Brookfieldpursuant to which Brookfield has granted a non-exclusive, royalty-free license to use the name “Brookfield” andthe Brookfield logo. Other than under this limited license, we do not have a legal right to the “Brookfield” nameand the Brookfield logo.57

Brookfield may terminate the licensing agreement effective immediately upon termination of our MasterServices Agreement or with respect to any licensee upon 30 days’ prior written notice of termination if any of thefollowing occurs:• the licensee defaults in the performance of any material term, condition or agreement contained inthe agreement and the default continues for a period of 30 days after written notice of terminationof the breach is given to the licensee;• the licensee assigns, sublicenses, pledges, mortgages or otherwise encumbers the intellectualproperty rights granted to it pursuant to the licensing agreement;• certain events relating to a bankruptcy or insolvency of the licensee; or• the licensee ceases to be an affiliate of Brookfield.A termination of the licensing agreement with respect to one or more licensees will not affect the validityor enforceability of the agreement with respect to any other licensees.Governmental, Legal and Arbitration ProceedingsOur company has not been since its formation and is not currently subject to any material governmental,legal or arbitration proceedings which may have or have had a significant impact on our company’s financialposition or profitability nor is our company aware of any such proceedings that are pending or threatened.We are occasionally named as a party in various claims and legal proceedings which arise during thenormal course of our business. We review each of these claims, including the nature of the claim, the amount indispute or claimed and the availability of insurance coverage. Although there can be no assurance as to theresolution of any particular claim, we do not believe that the outcome of any claims or potential claims of whichwe are currently aware will have a material adverse effect on us.RegulationOur business is subject to a variety of federal, state, provincial and local laws and regulations relating tothe ownership and operation of real property, including the following:• We are subject to various laws relating to environmental matters. These laws could hold us liablefor the costs of removal and remediation of certain hazardous substances or wastes released ordeposited on or in our properties or disposed of at other locations.• We must comply with regulations under building codes and human rights codes that generallyrequire that public buildings be made accessible to disabled persons.• We must comply with laws and regulations concerning zoning, design, construction and similarmatters, including regulations which impose restrictive zoning and density requirements.• We are also subject to state, provincial and local fire and life safety requirements.These laws and regulations may change and we may become subject to more stringent laws andregulations in the future. Compliance with more stringent laws and regulations could have an adverse effect onour business, financial condition or results of operations. We have established policies and procedures forenvironmental management and compliance, and we have incurred and will continue to incur significant capitaland operating expenditures to comply with health, safety and environmental laws and to obtain and comply withlicenses, permits and other approvals and to assess and manage potential liability exposure.58

Environmental ProtectionWe are committed to continuous improvement of our environmental performance. Sustainability is apriority for our tenants, and, as landlords, our goal is to exceed their expectations. We know that shrinking theenvironmental footprint in our buildings, and cutting back on energy, water and waste will have a positive effecton the financial performance of our assets.Our company intends to build all future office developments to a LEED Gold standard or localequivalent. The LEED Green Building Rating System is an internationally accepted scorecard for sustainablesites, water efficiency, energy and atmosphere, materials and resources, and indoor environmental quality.Within our 82 million square foot global office portfolio:• we have 24 LEED certifications;• 80% of our U.S. office properties have earned the EPA’s ENERGY STAR award and 100% of ourCanadian office properties have achieved BOMA BESt (Building Environmental Standards); and• 74% of our Australian office properties have received a 4-Star rating or higher under NABERS.We continue to expand and enhance the features, systems and programs that foster energy efficiency inour existing office buildings, as well as the health and safety of all of our tenants, employees and the community.We perform regular, comprehensive environmental reviews and upgrades at our office properties and endeavor tomaximize energy efficiency at every office building.Our goal is to be responsible stewards of our resources, and good citizens in all that we do. We are anactive contributor in the communities where we conduct business. We are proud of the commitment we havemade to corporate social responsibility. The initiatives we undertake and the investments we make in buildingour company are guided by our core set of values around sustainable development, as we create a culture andorganization that can be successful today and in the future.59

4.C. ORGANIZATIONAL STRUCTUREOrganizational ChartThe chart below represents a simplified summary of our organizational structure. All ownership interestsindicated below are 100% unless otherwise indicated. “GP Interest” denotes a general partnership interest and“LP Interest” denotes a limited partnership interest. Certain subsidiaries through which Brookfield AssetManagement holds units of our company and the Redemption-Exchange Units have been omitted. Each of theHolding Entities and each of the operating entities and intermediate holding companies that are directly orindirectly owned by the Holding Entities and that directly or indirectly hold our real estate assets are not shownon the chart. This chart should be read in conjunction with the explanation of our ownership and organizationalstructure below.Brookfield AssetManagement Inc.(Brookfield AssetManagement)(Ontario)Property General Partner (2)(Bermuda)BPY General Partner(Bermuda)LP Interest %(estimated)GP InterestLP Interest10% (estimated)PublicBrookfieldProperty Partners L.P.(our partnership)(Bermuda)LP Interest (1)% (estimated)LP InterestGP Interest LP Interest (1)90% (estimated)Property GP LP (2)(Bermuda)GP InterestBrookfield PropertyL.P. (2)(PropertyPartnership)(Bermuda)Holding Entities (3)Operating EntitiesOffice (4)Retail (4)Multi-Family & Industrial (4)Opportunistic Investments (4)Brookfield Office Properties Inc. (5) .. 50%Australia (6) …………………….…. 100%Europe……………………………..100%Canary Wharf Group plc…………. 22%General Growth Properties, Inc. (7) .. 21%Rouse Properties, Inc. (8) ………... 37%Brazil Retail Fund…..……….……..35%Australia…………………………..100%Multi-Family (9) ……………….10%-52%Industrial (9) ……. ………….….29%-41%Opportunity Funds (9) …………..... 29%-82%Finance Funds (9) ………………... .13%-33%(1) It is currently anticipated that public holders of our units will own approximately % of our units and Brookfield will ownapproximately % of our units upon completion of the spin-off. In addition, Brookfield will also own Redemption-Exchange Units ofthe Property Partnership that are redeemable for cash or exchangeable for our units in accordance with the Redemption-ExchangeMechanism, which could result in Brookfield owning approximately 90% (as currently anticipated) of the units of our company issuedand outstanding on a fully exchanged basis. On a fully exchanged basis, public holders of our units will own approximately 10% (ascurrently anticipated) of the units of our company issued and outstanding, and Brookfield will not hold any limited partnership units ofthe Property Partnership. These ownership percentages do not reflect the nominal amount of our units that Brookfield AssetManagement will withhold in connection with the satisfaction of Canadian federal and U.S. “backup” withholding tax requirementsfor non-Canadian registered shareholders.(2) Pursuant to the Voting Agreement, Brookfield has agreed that certain voting rights with respect to the Property General Partner,Property GP LP and the Property Partnership will be voted in accordance with the direction of our company.(3) Our company indirectly holds its interests in our operating entities through the Holding Entities, which are entities newly formed inconnection with the spin-off under the laws of the Province of Ontario, the State of Delaware and Bermuda. The Property Partnershipowns all of the common shares or equity interests, as applicable, of the Holding Entities. Brookfield holds $750 million of redeemablepreferred shares of one of our Holdings Entities formed under the laws of the Province of Ontario, which it received as partial60

consideration for causing the Property Partnership to directly acquire substantially all of Brookfield Asset Management’s commercialproperty operations. In addition, Brookfield has subscribed for a total of $15 million of preferred shares of the other three HoldingEntities (or wholly-owned subsidiaries thereof), which preferred shares will be entitled to vote with the common shares of theapplicable Holding Entity. Brookfield will have an aggregate of 1% of the votes to be cast in respect of any such applicable HoldingEntity or subsidiary. See Item 7.B. “Major Shareholders and Related Party Transactions — Related Party Transactions — Relationshipwith Brookfield — Preferred Shares of Certain Holding Entities”.(4) All percentages listed represent our economic interest in the applicable entity or group of assets, which may not be the same as ourvoting interest in those entities and groups of assets. All interests are rounded to the nearest one percent and are calculated as atMarch 31, 2012.(5) Our interest in Brookfield Office Properties is comprised of 49.6% of the outstanding common shares and 97.1% of the outstandingvoting preferred shares. Brookfield Office Properties owns an approximate 83.3% aggregate equity interest in Brookfield CanadaOffice Properties, a Canadian real estate investment trust that is listed on the TSX and the NYSE, and an approximate 84.3% interestin the U.S. Office Fund, which consists of a consortium of institutional investors and which is led and managed by Brookfield OfficeProperties.(6) Our Australian office platform consists of our economic interest in certain of our Australian office properties not held throughBrookfield Office Properties.(7) Our interest in GGP is comprised of an interest in approximately 21% (38% our consortium partners) of the outstanding shares ofcommon stock (assuming the exercise of all outstanding warrants to acquire additional shares of common stock, which warrants were“in-the-money” as at March 31, 2012).(8) Rouse is a newly formed NYSE-listed company that GGP spun-out to its shareholders on January 12, 2012. As at March 31, 2012 wehad interests of approximately 37% (54% with our consortium partners) of the outstanding shares of common stock.(9) Our economic interest set forth above is reflected as a range because our multi-family and industrial and our opportunistic investmentsportfolios are held through a combination of different Brookfield-sponsored private funds in which we hold varying interests.Our CompanyOur company was established on January 3, 2012 as a Bermuda exempted limited partnership registeredunder the Bermuda Limited Partnership Act of 1883, as amended, and the Bermuda Exempted Partnerships Actof 1992, as amended. Our company’s head and registered office is 73 Front Street, 5th Floor, Hamilton HM 12,Bermuda, and our company’s telephone number is +441 294-3304.Prior to the spin-off, we will acquire from Brookfield Asset Management substantially all of itscommercial property operations, including its office, retail, multi-family and industrial assets. We will beBrookfield’s flagship public commercial property entity and the primary entity through which Brookfield AssetManagement owns and operates these businesses on a global basis. We are positioned to take advantage ofBrookfield’s global presence, providing unitholders with the opportunity to benefit from Brookfield’s operatingexperience, execution abilities and global relationships.Property PartnershipOur company’s sole direct investment is a limited partnership interest in the Property Partnership. It iscurrently anticipated that Brookfield will own units of our company and Redemption-Exchange Units of theProperty Partnership that, in aggregate, represent approximately a 90% interest in the Property Partnership andholders of our units other than Brookfield will hold the remaining interest in the Property Partnership.Brookfield’s interest in the Property Partnership includes a 1% general partnership interest held by Property GPLP, a wholly-owned subsidiary of Brookfield Asset Management, which entitles it to receive equity enhancementdistributions and incentive distributions from the Property Partnership. See Item 7.B. “Major Shareholders andRelated Party Transactions — Related Party Transactions — Relationship with Brookfield — EquityEnhancement and Incentive Distributions”.Our ManagersThe Managers, wholly-owned subsidiaries of Brookfield Asset Management, provide management servicesto us pursuant to our Master Services Agreement. The senior management team that is principally responsible forproviding us with management services include many of the same executives that have successfully overseen andgrown Brookfield’s global real estate business, including Richard B. Clark who is Senior Managing Partner andChief Executive Officer of Brookfield Asset Management’s global real estate group.61

The BPY General PartnerThe BPY General Partner, a wholly-owned subsidiary of Brookfield Asset Management, has soleauthority for the management and control of our company. Holders of our units, in their capacities as such, maynot take part in the management or control of the activities and affairs of our company and do not have any rightor authority to act for or to bind our company or to take part or interfere in the conduct or management of ourcompany. See Item 10.B. “Additional Information — Memorandum and Articles of Association — Descriptionof Our Units and Our Limited Partnership Agreement”.Property GP LP and Property General PartnerThe Property GP LP serves as the general partner of the Property Partnership and has sole authority forthe management and control of the Property Partnership. The general partner of Property GP LP is the PropertyGeneral Partner, a corporation owned indirectly by Brookfield Asset Management but controlled by ourcompany, through the BPY General Partner, pursuant to the Voting Agreement. Property GP LP will be entitledto receive equity enhancement distributions and incentive distributions from the Property Partnership as a resultof its ownership of the general partnership interests of the Property Partnership. See Item 7.B. “MajorShareholders and Related Party Transactions — Related Party Transactions”.Holding EntitiesOur company indirectly holds its interests in our operating entities through the Holding Entities, whichare newly formed entities. The Property Partnership owns all of the common shares or equity interests, asapplicable, of the Holding Entities. Brookfield holds $750 million of redeemable preferred shares of one of ourHoldings Entities, which it received as partial consideration for causing the Property Partnership to directlyacquire substantially all of Brookfield Asset Management’s commercial property operations. Brookfield hassubscribed for a total of $15 million of preferred shares of the other three Holding Entities (or wholly-ownedsubsidiaries thereof). See Item 7.B. “Major Shareholders and Related Party Transactions — Related PartyTransactions — Relationship with Brookfield — Preferred Shares of Certain Holding Entities”.62

Operating EntitiesOur business is organized in four operating platforms: office, retail, multi-family and industrial, andopportunistic investment. The capital invested in these operating platforms is through a combination of: directinvestment; investments in asset level partnerships or joint venture arrangements; sponsorship and participation inprivate equity funds; and the ownership of shares in other public companies. Combining both publicly-listed andprivate institutional capital provides a competitive advantage in flexibility and access to capital to fund growth. Asat the dates set out below, we held our commercial property operations through our interests in the entities andgroups of assets set out below.Operations March 31, 2012 December 31, 2011 December 31, 2010 December 31, 2009OfficeBrookfield Office Properties Inc. (1) 50% 50% 50% 50%Australia (2) 100% 100% 100% 100%Europe 100% 100% 100% 100%Canary Wharf Group plc 22% 22% 22% 15%RetailGeneral Growth Properties, Inc. (3) 21% 21% 8% -Rouse Properties, Inc. (4) 37% - - -Brazil Retail Fund 35% 35% 25% 25%Interest in Australia 100% 100% 100% 100%Europe - - 100% 100%Multi-Family & Industrial (5)Multi-Family (through various funds) 10%-52% 10%-52% 29%-52% 29%-52%Industrial (through various funds) 29%-41% 29% - -Opportunistic Investments (5)Opportunity Funds 29%-82% 29%-82% 29%-82% 29%-82%Finance Funds 13%-33% 25%-33% 28%-33% 28%-33%(1) Our interest in Brookfield Office Properties is comprised of 49.6% of the outstanding common shares and 97.1% of the outstandingvoting preferred shares. Brookfield Office Properties owns an approximate 83.3% aggregate equity interest in Brookfield CanadaOffice Properties, a Canadian real estate investment trust that is listed on the TSX and the NYSE and an approximate 84.3% interest inthe U.S. Office Fund, which consists of a consortium of institutional investors and which is led and managed by Brookfield OfficeProperties.(2) Our Australian office platform consists of our economic interest in certain of our Australian office properties not held throughBrookfield Office Properties.(3) Our interest in GGP is comprised of an economic interest in approximately 21% (38% with our consortium partners) of theoutstanding shares of common stock (assuming the exercise of all outstanding warrants to acquire additional shares of common stock,which warrants were “in-the-money” as at March 31, 2012).(4) Rouse is a newly formed NYSE-listed company that GGP spun-out to its shareholders on January 12, 2012. As at March 31, 2012, wehad interest of approximately 37% (54% with our consortium partners) of the outstanding shares of common stock.(5) Our economic interest set forth in the table above is reflected as a range because we hold certain of our multi-family and industrial andopportunistic investment assets through a combination of Brookfield-sponsored private funds in which we hold varying interests.Office PlatformBrookfield Office Properties Inc.: Our U.S. and Canadian office properties and our economic interests inmost of our Australian office properties are held through our approximate 50% voting interest in BrookfieldOffice Properties, a global pure-play office company that is incorporated under the laws of Canada and is listedon the NYSE and the TSX. Brookfield Office Properties owns all of its Canadian office properties through itsapproximate 83.3% aggregate equity interest in Brookfield Canada Office Properties, a real estate investmenttrust formed under the laws of Canada and listed on the TSX and the NYSE. Brookfield Office Properties alsoowns a portion of its U.S. office properties through its approximate 84.3% interest in the U.S. Office Fund, whichconsists of a consortium of institutional investors and which is led and managed by Brookfield Office Properties.As at March 31, 2012, Brookfield Office Properties’ portfolio consisted of interests in 108 properties totaling78 million square feet and interests in 16 million square feet of high quality, centrally-located development sites.Brookfield has held an interest in Brookfield Office Properties and its predecessors for over 20 years.63

Australia: In addition to the office properties in Australia in which Brookfield Office Properties has aneconomic interest, we hold an economic interest in office properties in Sydney, Melbourne, Brisbane and NewZealand. As at March 31, 2012, this portfolio consisted of 15 office properties totaling approximately 3.6 millionsquare feet and 3 office development sites totaling approximately 1 million square feet. Brookfield acquired theseoffice properties in 2007.Europe: In addition to the office properties in Europe in which Brookfield Office Properties has aninterest, we own 100% of a 576,000 square foot office property at 20 Canada Square, Canary Wharf, London.Brookfield acquired an interest in this office property in 2005.Canary Wharf Group plc: The remainder of our European office property operations consists of ourapproximate 22% interest in Canary Wharf, a company incorporated under the laws of England and Waleswhich, as at March 31, 2012, owned and operated 16 office and retail properties (not including our interest in theoffice property at 20 Canada Square) totaling approximately 7 million square feet. Brookfield acquired aninterest in Canary Wharf in 2003.Retail PlatformGeneral Growth Properties, Inc.: A substantial portion of our retail properties are held through ourapproximate 21% interest in GGP, a NYSE-listed company that is incorporated under the laws of Delaware. GGPis the second largest mall owner in the United States. The majority of GGP’s properties rank among the highestquality U.S. retail assets. In late 2010, Brookfield successfully led GGP out of Chapter 11 with a cornerstoneinvestment. In February 2011, Brookfield acquired a further interest in GGP. We and the other members ofBrookfield’s consortium hold an aggregate of approximately 422 million shares of GGP, representingapproximately 38% of the outstanding shares of common stock of GGP (assuming the exercise of approximately65 million warrants to acquire additional shares of common stock, which warrants were “in-the-money” as atMarch 31, 2012). We are entitled to designate three of the nine individuals nominated for election to GGP’sboard of directors. As at March 31, 2012, GGP’s portfolio consisted of 135 retail properties totalingapproximately 136 million square feet. Brookfield acquired an interest in GGP in November 2010.Rouse Properties, Inc.: On January 12, 2012, we and other members of Brookfield’s consortium acquiredan approximate 37% interest in Rouse, a newly formed NYSE-listed company that is incorporated under the lawsof Delaware, that GGP spun-out to its shareholders. After giving effect to Rouse’s rights offering in March 2012,we increased our holdings to approximately 37% of the outstanding shares of Rouse common stock and we,together with other members of Brookfield’s consortium, hold approximately 54% of the outstanding shares ofRouse common stock. We have also provided a $100 million subordinated credit facility to Rouse. Rouse is theeighth largest publicly-traded regional mall owner in the United States based on square footage and owns andmanages dominant Class B regional malls in secondary and tertiary markets. As at March 31, 2012, Rouse ownedand operated 31 retail properties totaling approximately 22 million square feet.Brazil Retail Fund: We hold an approximate 35% interest in the Brazil Retail Fund, a Brookfieldsponsoredretail fund in Brazil. As at March 31, 2012, the Brazil Retail Fund’s portfolio consisted of 8 mallstotaling approximately 3 million square feet in Brazil, 59% of which is located in São Paolo, 33% of which islocated in Rio de Janeiro and 8% of which is located in Belo Horizonte. Brookfield acquired an interest in theBrazil Retail Fund in 2006.Australia: We hold an economic interest in Brookfield’s retail property portfolio in Australia. As atMarch 31, 2012, this portfolio consisted of 8 retail centers totaling approximately 3 million square feet, 46% ofwhich is located in Sydney, 31% of which is located in New Zealand and 23% of which is located in Brisbane.Brookfield acquired these retail properties in 2007.64

Multi-Family and Industrial PlatformMulti-Family: As at March 31, 2012, our multi-family portfolio consisted of interests in over 12,400multi-family units, which were held primarily through a number of Brookfield-sponsored real estate opportunityand finance funds.Industrial: As at March 31, 2012, our industrial portfolio consisted of interests in approximately 3 millionsquare feet of industrial space through our interests in several industrial properties in the United States. We holdthese interests both directly and through private funds.Opportunistic Investment PlatformAs at March 31, 2012, our opportunistic investment portfolio consisted of interests in approximately11 million square feet of office space, mezzanine loans and other real estate assets, which we hold primarilythrough a number of Brookfield-sponsored real estate opportunity and finance funds. The opportunity funds havemade direct real estate investments at the individual property, portfolio and entity levels. The finance funds arededicated commercial real estate debt funds which originate, invest in and manage portfolios primarilycomprised of commercial real estate mortgages and mezzanine loans. We hold the largest limited partner interestin almost all of these funds in which we are invested. Other than such real estate opportunity and finance funds,the remainder of our opportunistic investment portfolio consists of a minority interest in a public company, adirectly-owned office development in São Paolo, Brazil, and a mezzanine loan in Germany.4.D. PROPERTY, PLANTS AND EQUIPMENTSee Item 4.B. “Information on the Company — Business Overview” and Item 4.C. “Information on theCompany — Organizational Structure — Operating Entities”.ITEM 4A.UNRESOLVED STAFF COMMENTSNot applicable.ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS5.A. OPERATING RESULTSIntroductionPrior to completing the spin-off, Brookfield Property Partners L.P. will acquire from Brookfield AssetManagement, or Brookfield, substantially all of its commercial property operations, including its office, retail,multi-family and industrial assets. We will be the primary vehicle through which Brookfield will seek to own andoperate these businesses on a global basis. As at March 31, 2012 these operations included interests in 124 officeproperties and 182 retail properties. In addition, Brookfield had interests in an expanding multi-family andindustrial platform and an 18 million square foot commercial office development pipeline, positioning us well forcontinued growth. These operations also include interests in several Brookfield-sponsored real estate opportunityand finance funds that hold loans and opportunistic equity investments in commercial property businesses.Brookfield’s real estate assets are primarily located in North America, Europe, Australia and Brazil.This management’s discussion and analysis, or MD&A, covers the financial position as at March 31,2012, December 31, 2011 and December 31, 2010 and results of operations for the three months endedMarch 31, 2012 and 2011, and the years ended December 31, 2011, 2010 and 2009 of the business comprisingBrookfield’s commercial property operations that will be contributed to our company prior to the spin-off, (“ourbusiness”). The information in this MD&A should be read in conjunction with the carve-out financial statements65

of Brookfield’s commercial property operations, or the Financial Statements, for the aforementioned periodsincluded elsewhere in this Form 20-F.In addition to historical information, this MD&A contains forward-looking statements. Readers arecautioned that these forward-looking statements are subject to risks and uncertainties that could cause actualresults to differ materially from those reflected in the forward-looking statements. See section entitled “SpecialNote Regarding Forward-Looking Statements” at the beginning of this Form 20-F and Item 3.D. “KeyInformation—Risk Factors.”Basis of PresentationThe carve-out assets, liabilities and results of operations have not previously been reported on a standalonebasis and therefore the historical Financial Statements presented in this Form 20-F may not be indicative offuture financial condition or operating results. The Financial Statements include the assets, liabilities, revenues,expenses and cash flows of our business, including non-controlling interests therein, which reflect the ownershipinterests of other parties. We also discuss the results of operations on a segment basis, consistent with how wemanage and view our business. Our operating segments are office, including our office development projects,retail, multi-family and industrial, and opportunistic investments.Financial data provided has been prepared using accounting policies in accordance with IFRS. Non-IFRSmeasures used in this MD&A are reconciled to or calculated from such financial information. All operating andother statistical information is presented as if we own 100% of each property in our portfolio, unless otherwisespecified, regardless of whether we own all of the interests in each property, but unless otherwise specified excludesinterests held through Brookfield-sponsored opportunity and finance funds and Brookfield’s interest in CanaryWharf. We believe this is the most appropriate basis on which to evaluate the performance of properties in theportfolio relative to each other and others in the market. We consider the proportionate interests in our investmentsto be relevant in demonstrating our ability to manage the underlying economics of the relevant investments,including the financial performance and cash flows. Proportionate interest in the assets net of minority interestsrepresents our economic interest in the underlying property and is relevant as it represents the portion of theunderlying property net assets and operations that we manage that are attributable to us. All dollar references, unlessotherwise stated, are in millions of U.S. Dollars. Canadian Dollars, Australian Dollars, British Pounds, Euros, andBrazilian Reais are identified as “C$”, “A$”, “£”, “€” and “R$”, respectively.Performance MeasuresTo measure our performance, we focus on: property net operating income (“NOI”), funds from operation(“FFO”), total return (“Total Return”), net asset value (“IFRS Value”) and occupancy levels. NOI, FFO, TotalReturn and IFRS Value do not have standardized meanings prescribed by IFRS and therefore may differ fromsimilar metrics used by other companies. We define each of these measures as follows:• NOI: means revenues from operations of consolidated properties less direct operating costs, whichinclude all expenses attributable to the commercial property operations, such as propertymaintenance, utilities, insurance, realty taxes and property administration costs, and excludeinterest expense, depreciation and amortization, income taxes, fair value gains (losses) and generaland administrative expenses that do not relate directly to operations of a commercial property.• FFO: means income, including equity accounted income, before realized gains (losses), fair valuegains (losses) (including equity accounted fair value gains (losses)), income tax expense (benefits),and less non-controlling interests.• Total Return: means income before income tax expense (benefit), and related non-controllinginterests.• IFRS Value: represents equity attributable to parent company and means total assets less totalliabilities and non-controlling interests.66

NOI is used as a key indicator of performance as it represents a measure over which management has acertain degree of control. We evaluate the performance of our office segment by evaluating NOI from “Existingproperties”, or “same store” basis, and NOI from “Additions, dispositions and other.” NOI from existingproperties compares the performance of the property portfolio by excluding the effect of current and prior perioddispositions and acquisitions, including developments and “one-time items”, which for the historical periodspresented consists primarily of lease termination income. NOI presented within “Additions, dispositions andother” includes the results of current and prior period acquired, developed and sold properties, as well as the onetimeitems excluded from the “Existing properties” portion of NOI. We do not evaluate the performance of theoperating results of the retail segment on a similar basis as the majority of our investments in the retail segmentare accounted for under the equity method and, as a result, are not included in NOI. Similarly, we do not evaluatethe operating results of its other segments on a same store basis based on the nature of the investments. Weprovide the components of NOI by segment below under “— Reconciliation of Performance measures to IFRSMeasures”.We also consider FFO an important measure of our operating performance. FFO is a widely recognizedmeasure that is frequently used by securities analysts, investors and other interested parties in the evaluation ofreal estate entities, particularly those that own and operate income producing properties. Our definition of FFOincludes all of the adjustments that are outlined in the NAREIT definition of funds from operations, including theexclusion of gains (or losses) from the sale of real estate property, the add back of any depreciation andamortization related to real estate assets and the adjustment for unconsolidated partnerships and joint ventures. Inaddition to the adjustments prescribed by NAREIT, we also exclude any unrealized fair value gains (or losses)that arise as a result of reporting under IFRS, certain other non-cash items, if any, and income taxes that arise ascertain of our subsidiaries are structured as corporations as opposed to REITs. Because FFO excludes fair valuegains (losses), including equity accounted fair value gains (losses), realized gains (losses) and income taxes, itprovides a performance measure that, when compared year over year, reflects the impact to operations fromtrends in occupancy rates, rental rates, operating costs and interest costs, providing perspective not immediatelyapparent from net income. We provide a reconciliation of net income attributable to parent company to FFObelow under “— Reconciliation of Performance Measures to IFRS Measures”. We reconcile FFO to net incomeattributable to Brookfield rather than cash flow from operating activities as we believe net income is the mostcomparable measure.We use Total Return as key indicator as we believe that our performance is best assessed by consideringFFO plus the increase or decrease in the value of our assets over a period of time, because that is the basis onwhich we make investment decisions and operate our business. We provide reconciliation of net incomeattributable to parent company to Total Return below under “ — Reconciliation of Performance Measures toIFRS Measures”.We use IFRS Value as a key indicator of performance as it represents one of the principal valuationmetrics for real estate entities. IFRS Value is driven primarily by the valuation of our properties together with theeffect of leverage. We use IFRS Value to measure our performance in increasing our equity in net assets. Weprovide the components of IFRS Value by segment below in this MD&A.We do not utilize net income on its own as a key metric in assessing the performance of our businessbecause, in our view, it does not provide a consistent or complete measure of the ongoing performance of theunderlying operations. Nevertheless, we recognize that others may wish to utilize net income as a key measureand therefore provide a discussion of net income and a reconciliation to FFO in this MD&A.Overview of our BusinessOur business entails owning, operating and investing in commercial property both directly and throughoperating entities. We focus on well-located, high quality assets that generate or have the potential to generatelong-term, predictable and sustainable cash flows, require relatively minimal capital to maintain and, by virtue of67

arriers to entry or other characteristics, tend to appreciate in value over time. As at March 31, 2012, ourprincipal business segments consist of the following:OfficeRetail• We own interests in and operate one of the highest quality commercial office portfolios in theworld consisting of 124 properties containing approximately 82 million square feet of commercialoffice space. The properties are located in major financial, energy and government cities in NorthAmerica, Europe and Australia. Our strategy is to own and manage a combination of core assetsconsisting of prominent, well-located properties in high growth, supply-constrained markets thathave high barriers to entry and attractive tenant base, and to pursue an opportunistic strategy to takeadvantage of dislocations in the various markets in which we operate. Our goal is to maintain ameaningful presence in each of our primary markets in order to maximize the value of our tenantrelationships.• We also develop office properties on a selective basis throughout North America, Australia andEurope in close proximity to our existing properties. Our office development assets consist ofinterests in 18 high-quality, centrally located sites totaling approximately 18 million square feet.• Our U.S., Canadian and most of the economic interests in our Australian properties are heldthrough our approximate 50% voting interest in Brookfield Office Properties. Brookfield OfficeProperties in turn operates a number of private and listed entities through which public andinstitutional investors participate in our portfolios. This gives rise to non-controlling interests in theIFRS Value, FFO and Total Return of our office property portfolio. Our European operationsconsist primarily of our approximate 22% interest in Canary Wharf.• Our retail portfolio consists of interests in 182 well-located high quality retail centers in targetmarkets in the United States, Brazil and Australia encompassing approximately 164 million squarefeet of retail space. Similar to our office strategy, we look to maintain a meaningful presence in eachof our primary markets in order to maximize the value of our tenant relationships and pursue anopportunistic strategy to take advantage of dislocations in the various markets in which we operate.• A substantial portion of our retail properties are held through our approximate 21% interest inGeneral Growth Properties, or GGP, which we acquired during 2010 and in February 2011.• During the first quarter of 2012 GGP completed the spin-off of Rouse to its shareholders, includingus. Rouse subsequently completed an equity rights offering. Following the spin-off and ourparticipation in the rights offering, we own an approximately 37% interest in Rouse. Thetransaction is intended to allow the management teams of the respective companies to focus onstrategies that are most appropriate for the different businesses.Multi-Family and Industrial• Our multi-family and industrial investments are part of an expanding platform. At March 31, 2012,we had interests in over 12,400 multi-family units and approximately 3 million square feet ofindustrial space in North America held through Brookfield’s private funds.• We are seeking to leverage the deep sourcing and operating capabilities of Fairfield ResidentialCompany LLC, or Fairfield, for our future investments in multi-family properties. Fairfield, whichis 65% owned by Brookfield, is one of the largest vertically-integrated multi-family real estatecompanies in the United States and is a leading provider of acquisition, development, construction,renovation and property management services.• We have a joint venture with an industrial joint venture partner for the acquisition of industrialproperties in the United States, which we believe will provide us with access to investment68

Opportunistic Investmentsopportunities and enable us to leverage our industrial joint venture partner’s operating capabilities.Our partner has a fully-integrated, national platform and owns or manages 30 million square feetof industrial warehouse property and controls one of the largest industrial land banks in theUnited States.• We have interests in Brookfield-sponsored real estate opportunity and finance funds that includeinvestments in distressed and under-performing real estate assets and businesses and commercialreal estate mortgages and mezzanine loans. Through these funds we had interests at March 31, 2012in approximately 11 million square feet of office space, mezzanine loans and other real estate assetslocated in North America, Europe, Australia, Brazil and emerging markets.• The Brookfield sponsored real estate finance funds in which we have interests, invest in real estatefinance transactions in risk positions senior to traditional equity and subordinate to traditional firstmortgages or investment grade corporate debt. The Brookfield sponsored real estate opportunity fundsin which we have interests, are focused on assets where we can make improvements or reposition theproperty to increase the amount and stability of cash flows with a view to monetizing our investmentsonce such changes are realized over a medium-term time horizon. The opportunity funds also haveinvestments and specialty finance offerings, such as commercial real estate, real estate loans, and realestate-related securities, such as commercial and residential mortgage-backed securities.Recent Initiatives• Our operating teams completed a number of important initiatives to increase the values and cashflows in our office segment.Since the beginning of 2011 we acquired interests in office properties in New York, Denver,Washington D.C., Houston, Melbourne and Perth, and sold properties in New Jersey, Boston,Houston, Calgary and Melbourne.In the first four months of 2012, we signed over 2 million square feet of new leases, including a 1.2million square foot lease with Morgan Stanley for One New York Plaza announced in April 2012that represents the largest single-asset office lease in lower Manhattan since 2008. This led to areduction in our 2013-2017 lease rollover exposure by 130 basis points.In 2011, we signed approximately 11 million square feet of new commercial office leases ascompared to the 7.2 million square feet of new commercial office leases signed during the yearended December 31, 2010.• We are working on a number of attractive growth opportunities, including expansion of ourexisting operations and potential acquisitions.Commercial office development activities are focused on five projects comprising approximately 9million square feet of our total office development pipeline of 18 million square feet. We areactively advancing planning and entitlements and seeking tenants for these sites.Initial rents for new leases in our U.S. mall portfolio increased by 7.4% on a comparable basis andwe continued to reposition the business by spinning out 30 malls into a new entity focused on thesespecific operations.• We simplified the ownership of our U.S. and Australian office assets and better positioned keyoperating entities to create enhanced value.In the third quarter of 2011 we restructured our U.S. Office Fund, which is held within BrookfieldOffice Properties, and are now consolidating most of the U.S. Office Fund assets. In the thirdquarter of 2010, we transferred to Brookfield Office Properties, most of our economic interests inour Australian office properties.69

Financial Highlights and Performance as at March 31, 2012 and December 31, 2011 and the three monthsended March 31, 2012 and 2011The following tables reflect the results of operations for our business for the three months ended March31, 2012 and 2011 and as at March 31, 2012 and December 31, 2011. Further details on our operations andfinancial position are contained within the review of our business segments below.(US$ Millions) Three months ended Mar. 31, 2012 2011Total revenue $ 775 $ 603Net income 710 532Net income attributable to parent company 383 337Funds from operations 141 136(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Investment properties $ 28,138 $ 27,594Equity accounted investments 7,466 6,888Total assets 41,049 40,317Property debt 15,266 15,387Total equity 22,599 21,494Equity in net assets attributable to parent company 12,575 11,881The following table presents NOI, FFO and Total Return for the three months ended March 31, 2012 and2011 and IFRS Value as at March 31, 2012 and December 31, 2011 for the geographies and segments indicated:NOI FFO Total Return IFRS Value(US$ Millions) 2012 2011 2012 2011 2012 2011OfficeMar. 31,2012Dec. 31,2011United States $192 $106 $110 $113 $190 $191 $ 7,588 $ 7,395Canada 66 64 40 44 90 47 2,149 2,044Australia 76 64 53 33 64 39 2,533 2,315Europe 8 8 10 1 15 137 994 958Developments - - - - - - 589 560Unallocated (1) - - (117) (116) (117) (116) (6,985) (6,735)342 242 96 75 242 298 6,868 6,537RetailUnited States - - 49 56 313 57 4,272 3,938Australia 5 5 2 (2) 1 18 210 200Brazil 24 20 (1) (5) 6 (4) 321 311Europe - 1 - 1 - (3) - -29 26 50 50 320 68 4,803 4,449Multi-Family and Industrial 11 12 1 2 (5) 4 139 157Opportunistic Investments 27 38 (6) 9 23 12 765 738$409 $318 $ 141 $ 136 $ 580 $ 382 $12,575 $11,881(1) Balance sheet and statement of income amounts related to unsecured facilities, capital securities and non-controlling interests inBrookfield Office Properties, one of our operating entities.See “— Reconciliation of Performance Measures to IFRS Measures” in the MD&A for a reconciliation ofNOI, FFO and Total Return to the most directly comparable IFRS measures.70

First Quarter Performance HighlightsNet income attributable to parent company increased by $46 million during the three months ended March 31,2012 compared to the prior year period, as a result of the Total Return and income taxes.• NOI increased by $91 million during the three months ended March 31, 2012 compared to theprior year period.The increase during the quarter is primarily due to the acquisition of four office properties sinceMarch 31, 2011 discussed below, the consolidation of the U.S. Office Fund in the fourth quarter of2011 and currency appreciation relating to our Australian properties. This was offset by reducedoccupancies in the United States and the sale of operating assets in our opportunity funds.• FFO increased by $5 million during the three months ended March 31, 2012 compared to theprior year period.The increase during the quarter is primarily due to the reduction of interest expense as a result ofrefinancings in our office platform and a dividend received from our Canary Wharf investment.This was offset by a decrease in our opportunistic platform as result of the sale of operating assetsduring the period.• Total Return increased by $198 million during the three months ended March 31, 2012compared to the prior year period.The increase during the quarter is primarily related to the increases in NOI and FFO mentionedabove, along with significant fair value gains from our investment in GGP as a result of continuedcompression of capitalization rates in the United States. We also recorded realized gains from thedisposition of office properties in Calgary and Melbourne.IFRS Value increased by $694 million during the three months ended March 31, 2012.OfficeIFRS Value – OfficeThe increase during the quarter is primarily due to the increase in NOI, FFO and Total Return asdetailed above as well as additional investments in our opportunistic investments platform.The following table presents the IFRS Value of our office portfolio by region as at March 31, 2012 andDecember 31, 2011:(US$ Millions) United States Canada Australia Europe TotalMar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Office properties $13,160 $12,959 $4,784 $4,571 $3,721 $3,739 $ 537 $ 521 $22,202 $21,790Equity accounted investments 1,497 1,467 14 13 972 957 - - 2,483 2,437Accounts receivable and other 1,057 1,315 105 134 494 490 936 994 2,592 2,93315,714 15,741 4,903 4,718 5,187 5,186 1,473 1,515 27,277 27,160Property-specific borrowings 6,604 6,679 1,858 1,840 2,253 2,452 455 442 11,170 11,413Accounts payable and other 886 1,031 437 407 204 229 24 115 1,551 1,782Non-controlling interests 636 636 459 427 197 190 - - 1,292 1,253$ 7,588 $ 7,395 $2,149 $2,044 $2,533 $2,315 $ 994 $ 958 $13,264 $12,712UnallocatedUnsecured facilities $ 590 $ 381Capital securities 862 994Non-controlling interests 5,533 5,360IFRS Value (1) $ 6,279 $ 5,977(1) Does not include office developments which are described in the table below on a geographic basis.71

IFRS Value increased by $302 million during the quarter ended March 31, 2012 to $6.3 billion, excludingoffice development activities. This increase is a result of gains in the fair values of properties due to acombination of higher projected cash flows and lower discount rates, as well as the impact of currencyappreciation on the value of our Australian, Canadian and European properties. Unallocated non-controllinginterests relate primarily to the interests of other shareholders in Brookfield Office Properties, whereas the noncontrollinginterests in each region relate to funds and joint ventures in those regions.Specific major variances during the first quarter of 2012 include the following:• Valuation gains were recorded on properties located in the United States primarily as a result ofrecent leasing activity and an improved leasing horizon. In Canada, increases were driven byterminal capitalization rate compression of 30 basis points on average as a result of markettransaction activity.• Senior unsecured notes of $200 million were issued by Brookfield Office Properties, with proceedsused to pay down Australian property debt, reducing the interest rate by 300 basis points, from7.3% to 4.3%, and extending the term by four years.Equity accounted investments as at March 31, 2012 primarily include: in the United States, 245 ParkAvenue ($0.7 billion) and Grace Building ($0.6 billion); and in Australia, a variety of property funds and jointventures interests. Our interest in Canary Wharf ($0.9 billion) is classified as a financial asset and is included inaccounts receivable and other in the table above.The following table presents the IFRS Value of our office development activities by region:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011ConsolidatedassetsConsolidatedliabilitiesNon-ControllinginterestsIFRSValueConsolidatedassetsConsolidatedliabilitiesNon-ControllinginterestsAustraliaBrookfield Place, Perth (1) $ 942 $475 $233 $234 $ 865 $419 $223 $223Other 257 97 - 160 239 92 - 147North AmericaManhattan West, New York (2) 315 227 44 44 315 227 44 44Other 218 - 109 109 213 - 107 106Europe 85 - 43 42 81 - 41 40$1,817 $799 $429 $589 $1,713 $738 $415 $560(1) At March 31, 2012 consolidated liabilities consists of non-recourse floating rate debt bearing interest at 6.17% and maturing in 2014.(2) At March 31, 2012 consolidated liabilities include $122 million of non-recourse fixed rate debt, bearing interest at 5.9% and maturing in2018, and $105 million of non-recourse floating rate debt bearing interest at 6.0% and maturing in July 2012.As at March 31, 2012, we hold interests in centrally located office development sites with a totaldevelopment pipeline of approximately 18 million square feet in the United States, Canada, Australia andEurope. We classify our office development sites into two categories: (i) active development and (ii) planning.The only active development in our office segment is Brookfield Place (formerly City Square) in Perth, a926,000 square foot development which achieved practical completion on May 18, 2012 for a total cost ofA$945 million, or A$1,020/square foot.The remaining 17 million square feet in our office development pipeline are at varying points of planning.Included in our pipeline are the development rights to Manhattan West in New York City and 100 Bishopsgate inLondon, U.K. The development rights to Manhattan West, located on Ninth Avenue between 31st Street and33rd Street in New York City, include 5.4 million square feet of commercial office space entitlements. We arecommencing work to build the necessary foundations to position this site to be one of the first sites for officedevelopment in Manhattan in the next development cycle. We also hold an interest in 100 Bishopsgate, a wellpositioneddevelopment site in London, U.K., and have begun to prepare the site for construction. With all our72IFRSValue

development sites, we will proceed with developing these sites when our risk adjusted return hurdles andpreleasing targets are met. Until such time as these criteria is met, we are not able to estimate anticipatedcompletion dates and costs.Our office property debt is secured and non-recourse to our corporate subsidiaries other than theunsecured facilities noted below. These financings are typically structured on a loan-to-appraised value basis ofbetween 55% to 65% when the market permits. In addition, in certain circumstances where a building is leasedalmost exclusively to a high-credit quality tenant, a higher loan-to-value financing, based on the tenant’s creditquality, is put in place at rates commensurate with the cost of funds for the tenant. This execution reduces ourequity requirement and enhances our equity returns when financing certain properties. As of March 31, 2012, wehad a level of indebtedness of approximately 53% of our consolidated office properties.We attempt to match the maturity of our office property debt with the average lease term of our properties.At March 31, 2012, the average term to maturity of our property debt was 4 years, compared to our averagelease term of approximately 8 years. The details of our property debt for our consolidated office properties atMarch 31, 2012 are as follows:(US$ Millions) Weighted Average Rate Debt BalanceUnsecured FacilitiesBrookfield Office Properties revolving facility 2.4% $ 271Brookfield Office Properties Canada revolving facility 3.2% 120Brookfield Office Properties senior notes 4.3% 199Secured Property DebtFixed rate 6.1% 7,159Variable rate 5.7% 4,798$ 12,547Current $ 977Non-current 11,570$ 12,547As at March 31, 2012 we had $895 million of committed corporate credit facilities in Brookfield OfficeProperties consisting of a $695 million revolving credit facility from a syndicate of banks and bilateralagreements between Brookfield Office Properties and a number of Canadian chartered banks for an aggregaterevolving credit facility of C$200 million. The balance drawn on these facilities was $391 million (2011 – $381million). As at March 31, 2012, we also had $30 million (2011 – $30 million) of indebtedness outstanding toBrookfield.Capital securities includes certain Class AAA preferred shares issued by Brookfield Office Propertieswhich are presented as liabilities on the basis that they may be settled, at the issuer’s option, in cash or theequivalent value of a variable number of Brookfield Office Properties’ common shares. These represent sourcesof low cost capital to our business. Brookfield Office Properties had the following capital securities outstandingas at the dates indicated:(US$ Millions, except share information)SharesOutstandingCumulativeDividend Rate Mar. 31, 2012 (1) Dec. 31, 2011 (1)Class AAA Series F 8,000,000 6.00% $ 201 $ 196Class AAA Series G 4,400,000 5.25% 110 110Class AAA Series H 8,000,000 5.75% 201 196Class AAA Series I - 5.20% - 150Class AAA Series J 8,000,000 5.00% 201 196Class AAA Series K 6,000,000 5.20% 149 146Total $ 862 $ 994(1) Net of transaction costs of nil at March 31, 2012 (2011 - $1 million).73

On March 30, 2012, Brookfield Office Properties redeemed all of the outstanding Class AAA Series I sharesfor cash of C$25.00 per share. Capital securities includes $752 million (2011 - $884 million) repayable inCanadian dollars of C$750 million (2011 – C$903 million).Operating results – OfficeThe following table presents the NOI, FFO and Total Return of our office properties by region for thethree months ended March 31, 2012 and 2011:(US$ Millions) United States Canada Australia Europe TotalThree months ended Mar. 31, 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011NOI (1)Existing properties $ 97 $99 $ 64 $64 $68 $63 $ 8 $ 8 $ 237 $ 234Acquisitions, dispositions, and other 95 7 2 - 8 1 - - 105 8192 106 66 64 76 64 8 8 342 242Equity accounted income 20 54 1 5 14 16 - - 35 75Investment and other income 11 23 5 - 7 6 9 - 32 29223 183 72 69 97 86 17 8 409 346Interest expense 92 58 25 19 38 49 7 7 162 133Depreciation and amortization 3 2 1 1 3 2 - - 7 5Non-controlling interests 18 10 6 5 3 2 - - 27 17110 113 40 44 53 33 10 1 213 191UnallocatedInterest expense (19) (18)Operating costs (21) (23)Non-controlling interests (77) (75)FFO (1) 110 113 40 44 53 33 10 1 96 75Fair value changes 179 163 99 13 (4) 14 5 136 279 326Realized gains 1 - 25 - 16 - - - 42 -Non-controlling interests (100) (85) (74) (10) (1) (8) - - (175) (103)Total valuation gains 80 78 50 3 11 6 5 136 146 223Total Return (1) $ 190 $191 $ 90 $47 $64 $39 $15 $137 $ 242 $ 298(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for explanation ofcomponents of NOI, FFO, Total Return, and for a reconciliation to IFRS measures.NOI generated by existing office properties (i.e. those held throughout both the current and prior period) ispresented in the following table on a constant exchange rate basis, using the average exchange rate for the quarterended March 31, 2012 for the same period in 2011. This table illustrates the stability of these cash flows thatarises from the high occupancy levels and long-term lease profile.(US$ Millions) Three months ended Mar. 31, 2012 2011United States $ 97 $ 99Canada 64 63Australia 68 66Europe 8 8NOI relating to existing properties using normalized foreign exchange (1) 237 236Currency variance - (2)NOI relating to existing properties $ 237 $ 234Average in-place net rent per square foot $ 29.38 $ 28.26(1) Using the March 31, 2012 year to date average foreign exchange rates.NOI from existing properties for the quarter ended March 31, 2012 increased by $3 million. The increase isdriven by foreign currency, increased rents in Australia and Canada offset by decreased occupancy in the UnitedStates. Contributions from additions, dispositions and other since the beginning of the comparable periodincludes the consolidation of the U.S. Office Fund ($68 million) and acquisitions in Washington, D.C., Denver,Melbourne and Perth, partially offset by the sale of a property in Boston.74

The decrease in equity accounted income primarily reflects the transfer of the U.S. Office Fund ($29million), Four World Financial Center, and First Canadian Place to consolidated properties offset by incomefrom the acquisition of 450 West 33rd Street in New York and increased income from other equity accountedproperties. The increase in interest expense also reflects, in part, these activities, as well as the impact of foreigncurrency translation on borrowings in Australia and Canada.FFO for the three months ended March 31, 2012 increased by $21 million to $96 million from $75 millionfor the three months ended March 31, 2011. The increase is primarily a result of new acquisitions during theperiod and the refinancing of Australian debt which resulted in a decrease of interest expense. In addition, werecorded a $9 million dividend from our investment in Canary Wharf.Total Return for the three months ended March 31, 2012 decreased by $56 million from $298 million to$242 million for the three months ended March 31, 2011. The decrease is primarily from fair value gains inrespect of our investment in Canary Wharf offset by increased valuations in the United States and Canada in thefirst quarter of 2012 as a result of decreases in discount and terminal capitalization rates as detailed in the tablebelow. In addition, we also recorded realized gains from the sale of properties in Calgary and Melbourne in thefirst quarter of 2012.The key valuation metrics of our commercial office properties are presented in the following table. Thevaluations are most sensitive to changes in the discount rate and timing or variability of cash flows. A 100-basispoint change in the discount rate and terminal capitalization rate would result in a change in our IFRS Value,after deducting non-controlling interests, of $1.6 billion.United States Canada Australia Europe (1)Dec. 31, Mar. 31, Dec. 31, Mar. 31, Dec. 31, Mar. 31,2011 2012 2011 2012 2011 2012Mar. 31,2012Dec. 31,2011Discount rate 7.5% 7.5% 6.7% 6.7% 9.1% 9.1% 6.1% 6.1%Terminal cap rate 6.3% 6.3% 5.9% 6.2% 7.4% 7.5% n/a n/aInvestment horizon (years) 12 12 11 11 10 10 n/a n/a(1) The valuation method used by Europe is the direct capitalization method. The amounts presented as the discount rate relate to theimplied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.The results of operations are primarily driven by occupancy and rental rates of the office properties andstability of earnings is driven by the average lease term. The following tables present key metrics relating to inplaceleases of our office property portfolio:Occupancy(%)SameStoreOccupancy(%)Mar. 31, 2012 Dec. 31, 2011Avg.LeaseTerm(Years)Avg.“InPlace”NetRentMarketNetRentOccupancy(%)SameStoreOccupancy(%)Avg.LeaseTerm(Years)United States 91.0% 91.0% 7.4 $24.76 $31.33 91.3% 91.3% 7.0 $24.53 $31.21Canada 96.8% 96.8% 8.6 26.06 31.34 96.3% 96.3% 8.7 25.48 29.87Australia 97.4% 97.4% 5.9 52.22 52.56 96.6% 96.9% 6.1 48.33 48.93Europe 100.0% 100.0% 10.2 61.13 57.38 100.0% 100.0% 10.3 60.47 59.87Average 93.3% 93.3% 7.5 $29.38 $34.50 93.3% 93.9% 7.3 $28.55 $33.62Avg.“InPlace”NetRentMarketNetRentThe total worldwide portfolio occupancy rate in our office properties at March 31, 2012 remained flat at93.3% from December 31, 2011. Leasing performance continues to be very strong with 2.3 million square feet ofnew leases signed through April 2012. This includes a 1.2 million square foot lease with Morgan Stanley indowntown Manhattan. The new lease rates were on average 41% higher than the expiring rents which led to the3% increase in our average “in place” net rent. Currently, we have a leasing pipeline of 4 million square feetwhich would further improve our leasing profile.75

We use in-place net rents for our office segment, as a measure of leasing performance, and calculate this asthe annualized amount of cash rent receivable from leases on a per square foot basis including tenant expensereimbursements, less operating expenses being incurred for that space, but excluding the impact of straight-liningrent escalations or amortization of free rent periods. This measure represents the amount of cash generated fromleases in a given period.(US$)• In North America, at March 31, 2012, average in-place net rents across our portfolio increased by1% when compared to December 31, 2011. Net rents across this portfolio remained at a discount ofapproximately 25% to the average market rent of $31 per square foot. We believe that we will beable to maintain or increase our net rental income in the coming years and, together with our highoverall occupancy, exercise patience in signing new leases.• In Australia, at March 31, 2012, average in-place net rents in our portfolio were approximately $52per square foot, which represented a 1% discount to market rents. Leases in Australia typicallyinclude annual escalations, with the result that in-place lease rates tend to increase along with longtermincreases in market rents.The following table summarizes our leasing activity from December 31, 2011 to March 31, 2012:Dec. 31, 2011 Mar. 31, 2012LeasableArea (1)(000’sSq.Ft.)Leased (1)(000’sSq.Ft.)TotalExpiries(000’sSq. Ft.)ExpiringNet Rent($perSq.Ft.)Leasing(000’sSq. Ft.)Year OneLeasingNet Rent($perSq.Ft.)AverageLeasingNet Rent($perSq.Ft.)Acq.(Disp.)Additions(000’sSq. Ft.)LeasableArea(000’sSq. Ft.)Leased(000’sSq. Ft.)United States 44,019 40,168 (1,840) $18.81 1,782 $22.07 $26.46 - 44,071 40,110Canada 17,108 16,469 (245) 26.43 341 29.55 30.48 (293) 16,806 16,272Australia 10,166 9,819 (86) 37.76 175 41.52 46.56 (202) 9,965 9,706Europe 556 556 - - - - - - 556 556Total 71,849 67,012 (2,171) $20.42 2,298 $24.66 $28.59 (495) 71,398 66,644(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.Additionally, for the three months ended March 31, 2012, tenant improvements and leasing costs related toleasing activity that occurred averaged $39.86 per square foot, compared to $31.14 per square foot during thesame period in 2011.The following table presents the lease expiry profile of our office properties with the associated expiringaverage in-place net rents by region at March 31, 2012:(000’s sq. ft.)NetRentalArea AvailableCurrently(000’ssq.ft.)Expiring Leases2012 2013 2014 2015 2016 2017NetRent(000’ssq.ft.)NetRent(000’ssq.ft.)NetRent(000’ssq.ft.)NetRent(000’ssq.ft.)NetRent(000’ssq.ft.)NetRent2018 &BeyondUnited States 44,071 3,961 2,324 $18 5,631 $31 3,224 $23 2,717 $22 2,054 $25 2,052 $25 22,108 $33Canada 16,806 534 320 28 1,771 23 391 31 1,626 25 1,752 26 586 30 9,826 31Australia 9,965 259 361 53 659 43 880 54 1,183 61 1,078 65 1,050 51 4,495 72Europe 556 - - - - - 262 60 - - - - - - 294 63Total 71,398 4,754 3,005 $23 8,061 $30 4,757 $31 5,526 $31 4,884 $34 3,688 $33 36,723 $37Percentage of Total 100.0% 6.7% 4.2% 11.3% 6.7% 7.7% 6.8% 5.2% 51.4%(000’ssq.ft.)NetRent76

RetailIFRS Value – RetailThe following table presents IFRS Value of our retail properties by region as at March 31, 2012 andDecember 31, 2011:(US$ Millions) United States Australia Brazil TotalMar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Mar. 31,2012Dec. 31,2011Retail properties $ - $ - $377 $388 $1,902 $1,882 $2,279 $2,270Equity accounted investments 4,656 4,099 - - - 87 4,656 4,186Accounts receivable and other 210 183 3 19 435 461 648 6634,866 4,282 380 407 2,337 2,430 7,583 7,119Property-specific borrowings - - 184 185 863 1,011 1,047 1,196Accounts payable and other 182 51 (14) - 192 175 360 226Non-controlling interests 412 293 - 22 961 933 1,373 1,248IFRS Value $4,272 $3,938 $210 $200 $ 321 $ 311 $4,803 $4,449Specific major variances during the first quarter of 2012 included the following:• IFRS Value in our retail portfolio increased by $354 million to $4.8 billion at March 31, 2012 from$4.4 billion in December 31, 2011, reflecting valuation gains that were driven by a 20 basis-pointdecrease in the discount rate and terminal capitalization rates within our U.S. portfolio. In addition,the increase is also a result of the contribution of capital in connection with the Rouse rightsoffering.• GGP completed $2.9 billion in financings during the first four months of 2012, including a $1.4billion secured financing of Ala Moana Center and a $1 billion unsecured corporate line of credit.The Ala Moana financing has a ten year term, with interest-only payments based on a 4.23%coupon and replaces a $1.3 billion 5.59% financing that was scheduled to mature in 2018, resultingin a meaningful lengthening in maturity profile and a decrease in interest expense.• We sold three properties in our Brazil retail fund, with the sale proceeds applied to reduceborrowings.The details of property debt for our consolidated retail properties at March 31, 2012 are as follows:(US$ Millions) Weighted Average Rate Debt BalanceSecured Property DebtVariable rate 9.2% $1,047$1,047Current $ 127Non-current 920$1,04777

The details of retail property debt related to our equity accounted investment in GGP at March 31, 2012are as follows:(US$ Millions) Weighted Average Rate Debt Balance (1)Unsecured FacilitiesJunior subordinated notes 2.0% $ 206Secured Property DebtFixed rate 5.5% 16,513Variable rate 3.4% 1,972$18,691Current $ 2,506Non-current 16,185$18,691(1) Represents GGP’s consolidated and proportionate share of unconsolidated U.S. property debt.Operating results – RetailThe following table presents the NOI, FFO, and Total Return of our retail properties by region for thequarters ended March 31, 2012 and 2011:(US$ Millions) United States Australia Brazil Europe Total2012 2011 2012 2011 2012 2011 2012 2011 2012 2011NOI (1) $ - $ - $ 5 $ 5 $24 $20 $ - $ 1 $ 29 $26Equity accounted investments 51 63 - - 1 - - - 52 63Investment and other income - 2 - - 4 1 - - 4 351 65 5 5 29 21 - 1 85 92Interest expense - - 3 7 29 36 - - 32 43Other operating costs - - - - - - - - - -Non-controlling interests 2 9 - - 1 (10) - - 3 (1)FFO (1) $ 49 $56 $ 2 $ (2) $ (1) $ (5) $ - $ 1 $ 50 $50Fair value changes 290 (1) (1) 20 6 (1) - (2) 295 16Realized gains (losses) - - - - 4 - - (2) 4 (2)Non-controlling interests (26) 2 - - (3) 2 - - (29) 4Total valuation gains (losses) 264 1 (1) 20 7 1 - (4) 270 18Total Return (1) $ 313 $57 $ 1 $18 $ 6 $ (4) $ - $ (3) $ 320 $68(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for explanation ofcomponents of NOI, FFO, Total Return, and for a reconciliation to IFRS measures.NOI for the three months ended March 31, 2012 compared with three months ended March 31, 2011increased by $3 million to $29 million, primarily due to an 11% increase in tenant sales in Brazil.FFO for the three months ended March 31, 2012 remained flat when compared with the three monthsended March 31, 2011. The decrease in the United States is due to the inclusion of a portion of GGP’s 2010results in the first quarter of 2011 due to a catch up following the recapitalization in November 2010. This wasoffset by a reduction of interest expense in Australia and Brazil due the refinancing of debt.Total Return for the three months ended March 31, 2012 increased by $252 million to $320 million from$68 million. The increase is primarily a result of changes in the fair value of our investment in GGP.78

The key valuation metrics of our retail properties, including those within our equity accountedinvestments, are presented in the following table. The valuations are most sensitive to changes in the discountrate and timing or variability of cash flows. Discount and capitalization rates have declined meaningfully in all ofour principal regions, giving rise to appraisal gains.United States (1) Australia BrazilDec. 31, Mar. 31, Dec. 31, Mar. 31,2011 2012 2011 2012Mar. 31,2012Dec. 31,2011Discount rate 5.8% 6.0% 9.7% 9.8% 9.5% 9.6%Terminal cap rate n/a n/a 8.7% 8.9% 7.3% 7.3%Investment horizon (years) n/a n/a 10 10 10 10(1) The valuation method used by United States is the direct capitalization method. The amounts presented as the discount rate relate tothe implied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.The following table presents key metrics relating to in-place leases of our retail property portfolio:Occupancy(%)Avg. LeaseTerm (Years)Mar. 31, 2012 Dec. 31, 2011Avg. “In Place” Market Occupancy Avg. LeaseRent Rent (%) Term (Years)Avg. “In Place”RentUnited States (1) 92.2% 5.6 $56.67 $57.46 93.2% 5.1 $56.05 $55.87Australia 98.7% 7.2 12.15 12.49 98.0% 7.4 10.14 10.86Brazil 96.9% 6.8 53.25 53.40 94.7% 6.8 52.50 51.15Average 92.7% 5.7 $54.81 $55.65 93.4% 5.3 $54.08 $53.88(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.Our retail portfolio occupancy rate as at March 31, 2012 was 92.7%, down from 93.4% at December 31,2011. The decrease was primarily a result of tenants vacating after the holiday season.We use in-place rents for our retail segment as a measure of leasing performance, which is calculated on acash basis and consists of base minimum rent, plus reimbursements of common area costs, and real estate taxes.(US $)The following table summarizes our leasing activity in the first quarter of 2012:Dec. 31, 2011 Mar. 31, 2012Year One Average Acq.Total ExpiringLeasing Leasing (Disp.) LeasableLeased (1) Expiries Rent Leasing Rent Rent Additions Area(000’s (000’s ($ per (000’s ($ per ($ per (000’s (000’sSq.Ft.) Sq. Ft.) Sq.Ft.) Sq. Ft.) Sq.Ft.) Sq.Ft.) Sq. Ft.) Sq. Ft.)LeasableArea (1)(000’sSq.Ft.)MarketRentLeased(000’sSq. Ft.)United States 66,369 62,158 (5,579) $56.68 4,972 $54.86 $59.99 578 66,947 62,129Australia 2,744 2,689 - - - - - (80) 2,664 2,628Brazil 3,069 2,905 (22) 45.95 101 29.23 30.41 (283) 2,786 2,701Total 72,182 67,752 (5,601) $56.64 5,073 $54.35 $59.40 215 72,397 67,458(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.The average initial rent on leases signed in 2012 was $59.40 per square foot, up 4.9% or $2.76 per squarefoot as compared to the expiring rent on comparable leases.In addition, we incurred tenant allowances for our operating properties of $24 million for the threemonths ended March 31, 2012 and $27 million during the same period in 2011.79

The following table presents the lease expiry profile of our retail properties with the associated averageexpiring in-place rents by region at March 31, 2012:(000’s sq. ft.)NetRentalAreaCurrentlyAvailableExpiring Leases2012 2013 2014 2015 2016 2017 2018 & BeyondInplaceIn-In-In-In-In-In-(000’s place (000’s place (000’s place (000’s place (000’s place (000’s placeRent sq.ft.) Rent sq.ft.) Rent sq.ft.) Rent sq.ft.) Rent sq.ft.) Rent sq.ft.) Rent(000’ssq.ft.)United States (1) 61,929 4,818 3,759 $58 6,077 $54 6,308 $ 54 5,718 $61 5,815 $65 5,707 $66 23,727 $59Australia 2,664 36 26 51 23 40 31 44 122 29 729 11 344 18 1,354 13Brazil 2,786 85 728 52 338 47 294 104 405 75 241 78 118 25 577 15Total 67,379 4,939 4,513 $57 6,438 $54 6,633 $56 6,245 $61 6,785 $60 6,169 $63 25,658 $56Percentage ofTotal 100.0% 7.3% 6.7% 9.6% 9.8% 9.3% 10.1% 9.2% 38.0%(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.Multi-Family and IndustrialIFRS Value – Multi-Family and IndustrialThe following table presents IFRS Value of our multi-family and industrial segment:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Investment properties $1,023 $ 971Equity accounted investments 120 84Accounts receivable and other 72 571,215 1,112Property-specific borrowings 723 564Accounts payable and other liabilities 30 20Non-controlling interests 323 371IFRS Value $ 139 $ 157IFRS Value decreased over the period as a result of an increase of debt in a multi-family portfolio, whichwas refinanced at a lower interest rate and extended the term by three years. This was offset by furtherinvestments in the platform.Operating Results – Multi-Family and IndustrialThe following table presents the NOI, FFO and Total Return of our multi-family and industrial segmentfor the quarters ended March 31, 2012 and 2011:(US$ Millions) Three months ended Mar. 31, 2012 2011NOI (1) $11 $12Equity accounted investments 1 -12 12Interest and other expense 8 5Non-controlling interests 3 5FFO (1) $ 1 $2Fair value changes (16) 9Realized gains (losses) (3) -Non-controlling interests 13 (7)Total valuation gains (losses) (6) 2Total Return (1) $ (5) $4(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for explanation ofcomponents of NOI, FFO, Total Return, and for a reconciliation to IFRS measures.80

FFO for the three months ended March 31, 2012 decreased by $1 million from the three months endedMarch 31, 2011 due to the increase in borrowing costs. The decrease in total valuation gains of $8 million wasdriven by an increase in terminal cap rates in the United States, and realized losses from the sale of multi-familyproperties in the United States.The key valuation metrics of these properties are presented in the following table. The valuations are mostsensitive to changes in the discount rate and timing or variability of cash flows.United StatesCanadaMar. 31, 2012 Dec. 31, 2011 Mar. 31, 2012 Dec. 31, 2011Discount rate 8.5% 8.6% 8.7% 8.7%Terminal cap rate 8.5% 8.3% 7.4% 7.7%Investment horizon (years) 8 10 10 10Opportunistic InvestmentsIFRS Value – Opportunistic InvestmentsThe following table presents IFRS Value of our opportunistic investments segment:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Investment properties $ 883 $ 912Equity accounted investments 142 118Loans and notes receivable 971 994Accounts receivable and other 1,161 1,1893,157 3,213Property-specific borrowings 949 1,094Accounts payable and other liabilities 369 415Non-controlling interests 1,074 966IFRS Value $ 765 $ 738IFRS Value increased by $27 million to $765 million at March 31, 2012 from $738 million at December 31,2011. This was a result of further investments along with fair value and realized gains in our opportunity andfinance funds.As at March 31, 2012, our investment properties consist primarily of operating assets within the Brookfieldsponsored real estate opportunity funds. Accounts receivable and other includes a hotel operating property. Asummary of loans and notes receivable by collateral asset class, which primarily reside in our real estate financefunds, is as follows:(US$ Millions) March 31, 2012 December 31, 2011Interest RateMaturityUnpaid PrincipalBalancePercentage ofPortfolioUnpaid PrincipalBalancePercentage ofPortfolioAsset ClassHotel LIBOR plus 2.23% to 12.01% 2011 to 2014 $ 332 34% $ 401 40%Office LIBOR plus 2.00% to 11.00% 2012 to 2014 613 63% 593 60%Retail LIBOR plus 14.0% 2014 26 3% - -Total $ 971 100% $ 994 100%Our investments in loans and notes are evaluated for potential impairment, at a minimum on a quarterlybasis, by continually monitoring and performing a comprehensive review of the collateral properties underlying81

each individual loan. The review involves, but is not limited to, a detailed analysis of recent operating statementsin addition to rent rolls and other occupancy reports obtained from borrowers or loan reviewers. Further, wetypically communicate directly with third party sale, leasing or financing brokers to gather the latest informationon local markets or current market trends. By reviewing this information, we are able to make an informedassessment regarding the expected future performance of underlying collateral properties and therefore reach aconclusion about the credit quality and levels of risk associated with existing investments. As such, we do notgroup the loan portfolio by credit quality indicators based on the likelihood of loss.Property debt related to our opportunistic investments segment totaled $949 million at March 31, 2012 andhad a weighted average interest rate of 4.04% and an average term to maturity of 6.3 years.Other liabilities consists primarily of obligations relating to our real estate finance funds which are securedby loans and notes receivable having a carrying value of $0.3 billion (2011 - $0.7 billion).Operating Results – Opportunistic InvestmentsThe following table presents the NOI, FFO, and Total Return of our opportunistic investments businessfor the three months ended March 31, 2012 and 2011:(US$ Millions) Three months ended Mar. 31, 2012 2011NOI (1) $ 27 $ 38Investment and other income 2 -29 38Interest and other expense 23 16Depreciation and amortization 32 -Non-controlling interests (20) 13FFO (1) $ (6) $ 9Fair value changes 81 8Realized gains 35 -Non-controlling interests (87) (5)Total valuation gains 29 3Total Return (1) $ 23 $ 12(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for explanation ofcomponents of NOI, FFO, Total Return, and for a reconciliation to IFRS measures.NOI for the three months ended March 31, 2012 decreased by $11 million compared to the three monthsended March 31, 2011 as a result of the sale of operating assets in the current period. FFO for the three monthsended March 31, 2012 decreased by $15 million when compared with the three months ended March 31, 2011.This was a result of the decrease in NOI as well as depreciation and amortization and interest expense of a hotelasset we acquired at the end of the first quarter of 2011. The decrease was partially offset by an increase ininvestment and other income which is a result of income received from distressed loan portfolios that wereacquired by our opportunity funds.Total Return for the three months ended March 31, 2012 increased by $11 million when compared to thethree months ended March 31, 2011 as a result of an increase in realized gains from the disposition of assets andvaluation gains in our opportunity and finance funds, net of non-controlling interests therein.The key valuation metrics of these properties are presented in the following table. The valuations are mostsensitive to changes in the discount rate and timing or variability of cash flows.United StatesMar. 31, 2012 Dec. 31, 2011Discount rate 8.6% 8.2%Terminal cap rate 7.4% 8.1%Investment horizon (years) 10 1082

Financial Highlights and Performance as at December 31, 2011 and 2010 and the years ended December 31,2011, 2010 and 2009The following tables reflect the results for our business for each of the years ended December 31, 2011, 2010 and2009 and as at December 31, 2011 and 2010. Further details on our operations and financial position are containedwithin the review of our business segments below.(US$ Millions) 2011 2010 2009Total revenue $ 2,820 $ 2,270 $ 1,999Net income 3,745 2,109 (734)Net income attributable to parent company 2,323 1,026 (477)FFO 576 426 391(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Investment properties $ 27,594 $ 20,960Equity accounted investments 6,888 4,402Total assets 40,317 30,567Property debt 15,387 11,964Total equity 21,494 15,144Equity attributable to parent company 11,881 7,464See “— Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for a reconciliationof NOI, FFO and Total Return to the most directly comparable IFRS measures.Performance HighlightsNet income attributable to parent company increased by $1.3 billion and $1.5 billion during the years endedDecember 31, 2011 and 2010, respectively, compared to their prior periods, as a result of the changes discussedbelow in Total Return and increases in income tax expense.• NOI increased by $257 million and $126 million during the years ended December 31, 2011 and 2010,respectively, compared to their prior periods.The increase during 2011 is primarily due to new leasing activity and currency appreciation in ourAustralian and Canadian properties offset by reduced occupancies. In addition, the consolidation of theU.S. Office Fund, as well as acquisitions during the period, also contributed to the increase. The increaseduring 2010 is primarily attributable to property acquisitions and the completion of development projects.• FFO increased by $150 million and $35 million during the years ended December 31, 2011 and 2010,respectively, compared to their prior periods.The increase during 2011 is primarily due to the FFO from our investments in GGP which were acquired inNovember 2010 and February 2011, offset by the increase of non-controlling interest as a result of thetransfer of economic interests in 16 Australian assets to Brookfield Office Properties. The increase during2010 is primarily related to our office segment, which was offset by the sale of income producinginvestments in our opportunity funds and operating loss in our retail platform.83

• Total Return increased by $1.5 billion and $1.7 billion during the years ended December 31,2011 and 2010, respectively, compared to their prior periods.The increase during 2011 and 2010 is primarily related to the increases in FFO as mentioned aboveand higher projected cash flows and lower discount rates across our office portfolio which isdetailed below under “— Office.” In addition, in 2011 we had significant fair value gains from ourinvestment in GGP as a result of compression of the implied capitalization rates in the UnitedStates.IFRS Value increased by $4.4 billion during the year ended December 31, 2011.The increase during 2011 is primarily due to the increase in net income as detailed above and ouradditional investment of $1.7 billion into GGP in February 2011, which increased our ownership toapproximately 21%.OfficeIFRS Value – OfficeThe following table presents the IFRS Value of our office portfolio by region as at December 31, 2011and 2010:(US$ Millions) United States Canada Australia Europe TotalDec. 31,2011Dec. 31,2010Dec. 31,2011Dec. 31,2010Dec. 31,2011Dec. 31,2010Dec. 31,2011Dec. 31,2010Dec. 31,2011Dec. 31,2010Office properties $12,959 $ 7,119 $4,571 $4,179 $3,739 $3,321 $ 521 $ 517 $21,790 $15,136Equity accounted investments 1,467 2,168 13 21 957 976 - - 2,437 3,165Accounts receivable and other 1,315 1,253 134 193 490 387 994 831 2,933 2,66415,741 10,540 4,718 4,393 5,186 4,684 1,515 1,348 27,160 20,965Property-specific borrowings 6,679 3,701 1,840 1,670 2,452 2,434 442 443 11,413 8,248Accounts payable and other 1,031 755 407 372 229 94 115 123 1,782 1,344Non-controlling interests 636 407 427 270 190 126 - - 1,253 8037,395 5,677 2,044 2,081 2,315 2,030 958 782 12,712 10,570UnallocatedUnsecured facilities 381 428Capital securities 994 1,038Non-controlling interests 5,360 4,321IFRS Value (1) $ 5,977 $ 4,783(1) Does not include office developments which are described in the table below on a geographic basis.IFRS Value increased by $1.2 billion during the year ended December 31, 2011 to $6.0 billion, excludingoffice development activities. These increases represent gains in the fair values of properties due to acombination of higher projected cash flows and lower discount rates, as well as the impact of currencyappreciation on the value of our Australian and Canadian properties. Unallocated non-controlling interests relateprimarily to the interests of other shareholders in Brookfield Office Properties, whereas the non-controllinginterests in each region relate to funds and joint ventures in those regions.Specific 2011 major variances include the following:• In the third quarter of 2011, we concluded the joint venture with our partner in the portfolio ownedthrough the U.S. Office Fund, which resulted in the consolidation of most of the underlying properties.This added $5.0 billion and $3.3 billion to the carrying value of our office properties and property specificborrowings, respectively.• The carrying value of equity accounted investments declined by $0.7 billion to $2.4 billion, representingthe consolidation of the U.S. Office Fund, offset by the inclusion of equity accounted properties withinthe U.S. Office Fund’s portfolio, and the reclassification of Four World Financial Center to consolidatedproperties following our acquisition of our partner’s interest in the building.84

Equity accounted investments as at December 31, 2011 primarily include: in the United States, 245 ParkAvenue ($0.6 billion) and Grace Building ($0.6 billion); and in Australia, a variety of property funds and jointventures interests. Our interest in Canary Wharf ($0.9 billion) is classified as a financial asset and is included inaccounts receivable and other in the table above.The following table presents the IFRS Value of our office development activities by region:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010ConsolidatedassetsConsolidatedliabilitiesNon-ControllinginterestsIFRSValueConsolidatedassetsConsolidatedliabilitiesNon-ControllinginterestsAustraliaBrookfield Place, Perth (1) $ 865 $ 419 $ 223 $ 223 $ 597 $ 203 $ 197 $ 197Other 239 92 - 147 244 100 - 144North AmericaManhattan West, New York (2) 315 227 44 44 280 227 27 26Other 213 - 107 106 209 - 104 105Europe 81 - 41 40 74 - 37 37$1,713 $ 738 $ 415 $ 560 $ 1,404 $ 530 $ 365 $ 509(1) At December 31, 2011 consolidated liabilities consists of non-recourse floating rate debt bearing interest at 6.50% and maturing in2014.(2) At December 31, 2011 consolidated liabilities include $122 million of non-recourse fixed rate debt, bearing interest at 5.9% andmaturing in 2018, and $105 million of non-recourse floating rate debt bearing interest at 6.0% and maturing in 2012.As at December 31, 2011, we held interests in centrally located office development sites with a totaldevelopment pipeline of approximately 18 million square feet in the United States, Canada, Australia, andEurope. We classify our office development sites into two categories: (i) active development and (ii) planning.The only active development in our office segment is Brookfield Place (formerly City Square) in Perth, a926,000 square foot development which achieved practical completion on May 18, 2012 for a total cost of A$945million, or A$1,020/square foot. As of December 31, 2011, costs incurred on the Brookfield Place developmentwere A$823 million.IFRSValueThe remaining 17 million square feet in our office development pipeline are in varying stages of planning.Included in our pipeline are the development rights to Manhattan West in New York City and 100 Bishopsgate inLondon, U.K. The rights Manhattan West, located on Ninth Avenue between 31st Street and 33rd Street in NewYork City, includes 5.4 million square feet of commercial office space entitlements. We are commencing work tobuild the necessary foundations to position this site to be one of the first sites for office development inManhattan in the next development cycle. We also hold an interest in 100 Bishopsgate, a well-positioneddevelopment site in London, U.K., and have begun to prepare the site for construction. With all our developmentsites, we will proceed with developing these sites when our risk adjusted return hurdles and preleasing targets aremet. Until such time as these criteria is met, we are not able to estimate anticipated completion dates and costs.As of December 31, 2011, we had a level of indebtedness of approximately 54% of our consolidatedoffice properties.85

We attempt to match the maturity of our office property debt with the average lease term of ourproperties. At December 31, 2011, the average term to maturity of our property debt was 5 years, compared toour average lease term of 7 years. The details of our property debt for our consolidated office properties atDecember 31, 2011 are as follows:(US$ Millions) Weighted Average Rate Debt BalanceUnsecured FacilitiesBOP revolving facility 2.4% $ 264BPO Canada revolving facility 3.3% 117Secured Property DebtFixed rate 6.0% 7,694Variable rate 6.2% 4,457$ 12,532Current $ 1,022Non-current 11,510$ 12,532As at December 31, 2011 we had $782 million of committed corporate credit facilities in BrookfieldOffice Properties consisting of a $660 million revolving credit facility from a syndicate of banks and bilateralagreements between Brookfield Canada Office Properties and a number of Canadian chartered banks for anaggregate revolving credit facility of C$125 million. The balance drawn on these facilities was $381 million(2010 – nil). As at December 31, 2011, we also had $30 million (2010 – $30 million) of indebtedness outstandingto Brookfield.Capital securities includes certain of Brookfield Office Properties’ Class AAA preferred shares issued byBrookfield Office Properties which are presented as liabilities on the basis that they may be settled, at the issuer’soption, in cash or the equivalent value of a variable number of Brookfield Office Properties’ common shares.These represent sources of low cost capital to our business. Brookfield Office Properties had the followingcapital securities outstanding as at the dates indicated:(Millions, except share information)SharesOutstandingCumulativeDividend Rate Dec. 31, 2011 (1) Dec. 31, 2010 (1)Class AAA Series F 8,000,000 6.00% $ 196 $ 200Class AAA Series G 4,400,000 5.25% 110 110Class AAA Series H 8,000,000 5.75% 196 200Class AAA Series I 6,130,022 5.20% 150 179Class AAA Series J 8,000,000 5.00% 196 200Class AAA Series K 6,000,000 5.20% 146 149Total $ 994 $ 1,038(1) Net of transaction costs of $1 million and $2 million at December 31, 2011 and December 31, 2010, respectively.86

Operating results – OfficeThe following table presents the NOI, FFO and Total Return of our office properties by region for the yearsended December 31, 2011, 2010 and 2009:(US$ Millions) United States Canada Australia Europe Total2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009NOI (1)Existing properties $ 362 $ 386 $ 380 $ 218 $ 210 $ 192 $ 136 $ 120 $ 125 $32 $31 $ 31 $ 748 $ 747 $ 728Additions, dispositionsand other 199 32 79 41 33 10 128 94 29 - - - 368 159 118561 418 459 259 243 202 264 214 154 32 31 31 1,116 906 846Equity accounted income 172 232 237 17 18 - 62 56 12 - - - 251 306 249Investment and other income 81 48 34 44 65 34 32 5 5 17 24 15 174 142 88814 698 730 320 326 236 358 275 171 49 55 46 1,541 1,354 1,183Interest expense 319 229 239 82 78 56 207 173 91 29 28 28 637 508 414Depreciation and amortization 7 8 6 2 5 5 10 7 5 - - - 19 20 16Non-controlling interests 53 34 22 23 16 13 7 4 - - - - 83 54 35435 427 463 213 227 162 134 91 75 20 27 18 802 772 718UnallocatedInterest expense (70) (67) (71)Operating costs (83) (79) (99)Non-controlling interests (337) (259) (225)FFO (1) 435 427 463 213 227 162 134 91 75 20 27 18 312 367 323Fair value changes 860 732 (626) 211 125 (357) 74 94 (280) 174 49 (52) 1,319 1,000 (1,315)Realized gains 318 35 50 - 28 - - 50 - - - - 318 113 50Non-controlling interests (628) (452) 308 (127) (78) 182 (56) (33) (6) - - - (811) (563) 484Total valuation gains (losses) 550 315 (268) 84 75 (175) 18 111 (286) 174 49 (52) 826 550 (781)Total Return (1) $ 985 $ 742 $ 195 $ 297 $ 302 $ (13) $ 152 $ 202 $(211) $194 $76 $(34) $1,138 $ 917 $ (458)(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for reconciliation of NOI,FFO and Total Return to IFRS measures.NOI generated by existing office properties since the beginning of 2009 (i.e. those held throughout both thecurrent and prior period) is presented in the following table on a constant exchange rate basis, using the averageexchange rate for the year ended December 31, 2011 for the same period in 2010 and 2009. This table illustratesthe stability of these cash flows that arises from the high occupancy levels and long-term lease profile.(US$ Millions) 2011 2010 2009United States $ 362 $ 386 $ 380Canada 218 219 221Australia 136 135 163Europe 32 32 32NOI using normalized foreign exchange (1) 748 772 796Currency variance - (25) (68)$ 748 $ 747 $ 728Average in-place net rent per square foot $ 28.55 $ 28.05 $ 26.90(1) Using the 2011 year to date average foreign exchange rates.NOI for the year ended December 31, 2011 was in line with the prior year, although NOI decreased in theUnited States. The decrease in the United States was driven by occupancy reductions due to the expiry of leasesin New York and Boston. Contributions from additions, dispositions and other since the beginning of thecomparable period includes the consolidation of the U.S. Office Fund ($127 million) and the New ZealandProperty Fund, as well as acquisitions in Houston, Washington, D.C., Denver, Melbourne and Perth, partiallyoffset by the sale of properties in Boston and New Jersey.87

The decrease in equity accounted income reflects the transfer of the U.S. Office Fund to consolidatedproperties ($70 million) offset by income from the acquisition of interests in a new equity accounted property inNew York and increased income from other equity accounted properties. The increase in interest expense alsoreflects, in part, these activities, as well as the impact of foreign currency translation on borrowings in Australia andCanada.NOI for the year ended December 31, 2010 compared with the prior year increased by 3% to $747 millionbut decreased by 3% when excluding the effect of currency depreciation. Contractual increases in existing leasesand new leasing activity which led to higher in-place net rents were offset by reduced occupancy following theexpiry of leases in New York and Boston. Contributions from additions, dispositions and other since the beginningof the comparable period includes acquisitions in Houston and Washington, D.C., the consolidation of the NewZealand Property Fund and the completion of the Bay Adelaide Centre development in late 2009. The increase ininterest expense reflects these activities as well as the impact of foreign currency translation on borrowings inAustralia and Canada.FFO for the year ended December 31, 2011 decreased by $55 million to $312 million from $367 million inthe prior period. The decrease is primarily due to the increase of unallocated non-controlling interest which is aresult of the transfer of interests in the Australian assets to Brookfield Office Properties. In addition, the CanaryWharf dividend was $16 million in 2011 compared to $26 million in 2010, which was offset by income earned bynewly acquired properties in the period.FFO for the year ended December 31, 2010 increased by $44 million to $367 million from $323 million inthe prior year. The increase is a result of favorable foreign currency fluctuation in Canada and Australia and a $26million dividend from Canary Wharf (2009—nil) offset by an increase in unallocated non-controlling interest,which was a result of the transfer of Australian economic interests to Brookfield Office Properties.Total Return for the year ended December 31, 2011 increased by $221 million to $1.1 billion from $917million in the prior year. The increase in valuation gains is a result of decrease in discount and terminalcapitalization rates as detailed in the table below, we also recorded realized gains in the United States as a result ofthe sale of properties in New Jersey, Boston, and Houston. This was offset by the decrease in FFO as mentionedabove.Total Return for the year ended December 31, 2010 increased by $1.4 billion to $917 million from $(458)million in the prior year. The increase in valuation gains is a result of decrease in discount and terminalcapitalization rates as detailed in the table below. We also recorded realized gains in the United States, Canada andAustralia as a result of the sale of properties in Washington, D.C, Edmonton and New Zealand. In addition, we alsohad an increase in FFO as mentioned above. The loss in 2009 is related to the increase of discount and terminalcapitalization rates from 2008.The key valuation metrics of our commercial office properties are presented in the following table. Thevaluations are most sensitive to changes in the discount rate and timing or variability of cash flows. A 100-basispoint change in the discount rate and terminal capitalization rate would result in a change in our 2011 IFRS Value,after deducting non-controlling interests, of $1.6 billion. Discount and capitalization rates have declinedmeaningfully in all of our principal regions since 2009, giving rise to valuation gains.Dec. 31,2011United States Canada Australia Europe (1)Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,2010 2009 2011 2010 2009 2011 2010 2009 2011 2010Dec. 31,2009Discount rate 7.5% 8.1% 8.8% 6.7% 6.9% 7.4% 9.1% 9.2% 9.3% 6.1% 6.5% 6.9%Terminal cap rate 6.3% 6.7% 6.9% 6.2% 6.3% 6.7% 7.5% 7.7% 7.7% n/a n/a n/aInvestment horizon (years) 12 10 10 11 11 10 10 10 10 n/a n/a n/a(1) The valuation method used by Europe is the direct capitalization method. The amounts presented as the discount rate relate to the impliedcapitalization rate. The terminal capitalization rate and investment horizon are not applicable.88

The results of operations are primarily driven by occupancy and rental rates of the office properties andstability of earnings is driven by the average lease term. The following tables present key metrics relating to inplaceleases of our office property portfolio:Occupancy(%)December 31, 2011 December 31, 2010 December 31, 2009SameStoreOccupancy(%)Avg.LeaseTerm(Years)Avg.“InPlace”NetRentMarketNetRentOccupancy(%)SameStoreOccupancy(%)Avg.LeaseTerm(Years)Avg.“InPlace”NetRentMarketNetRentOccupancy(%)SameStoreOccupancy(%)Avg.LeaseTerm(Years)UnitedStates 91.3% 91.9% 7.0 $24.53 $31.21 94.0% 94.8% 7.1 $24.54 $29.20 93.5% 93.7% 7.1 $24.18 $27.83Canada 96.3% 96.6% 8.7 25.48 29.87 96.0% 97.0% 7.6 25.99 24.52 98.6% 98.7% 6.8 24.09 24.52Australia 96.6% 97.7% 6.1 48.33 48.93 98.4% 98.2% 7.1 47.44 48.03 97.7% 97.6% 7.6 42.70 49.10Europe 100.0% 100.0% 10.3 60.47 59.87 100.0% 100.0% 10.0 61.05 60.04 100.0% 100.0% 17.1 60.00 57.00Average 93.3% 93.9% 7.3 $ 28.55 $33.62 95.1% 95.9% 7.2 $28.05 $30.67 95.3% 95.5% 7.2 $26.90 $30.02Avg.“InPlace”NetRentMarketNetRentThe worldwide portfolio occupancy rate in our office properties at December 31, 2011 was 93.3%, downfrom 95.1% at December 31, 2010. The decrease in occupancy levels from prior periods is primarily due to adecline in the United States to 91.3% from 94.0% at December 31, 2010. The decline is due to the sale of 1400Smith Street in Houston, which was 100% leased, lease expirations in New York and Boston, and the acquisitionof underleased properties at attractive values. Occupancy levels elsewhere in our portfolio remain favorable. In2011, we leased approximately 11 million square feet and currently have a leasing pipeline of 5 million squarefeet, which would further improve our leasing profile.We use in-place net rents for our office segment, as a measure of leasing performance, and calculate thisas the annualized amount of cash rent receivable from leases on a per square foot basis including tenant expensereimbursements, less operating expenses being incurred for that space, but excluding the impact of straight-liningrent escalations or amortization of free rent periods. This measure represents the amount of cash generated fromleases in a given period.(US $)• In North America, at December 31, 2011, average in-place net rents across our portfolio remainedflat compared to December 31, 2010. Net rents across this portfolio remained at a discount ofapproximately 24% to the average market rent of $31 per square foot. This gives us confidence thatwe will be able to maintain or increase our net rental income in the coming years and, together withour high overall occupancy, to exercise patience in signing new leases.• In Australia, at December 31, 2011, average in-place net rents in our portfolio was approximately$48 per square foot, which represented a 2% discount to market rents. Leases in Australia typicallyinclude annual escalations, with the result that in-place lease rates tend to increase along with longtermincreases in market rents.The following table presents our leasing activity from December 31, 2010 to December 31, 2011:Dec. 31, 2010 Dec. 31, 2011LeasableArea (1) Leased (1)(000’s Sq.Ft.) (000’s Sq.Ft.)TotalExpiries(000’s Sq. Ft.)ExpiringNet Rent($per Sq.Ft.)LeasingYear OneLeasingNet RentAverageLeasingNet RentAcq.(Disp.)Additions(000’s Sq. Ft.) ($per Sq.Ft.) ($per Sq.Ft.) (000’s Sq. Ft.)LeasableArea(000’s Sq. Ft.)Leased(000’s Sq. Ft.)UnitedStates (2) 44,106 41,457 (7,161) $24.96 5,688 $24.58 $26.98 184 44,019 40,168Canada 17,161 16,474 (3,857) 27.53 3,889 28.41 29.45 (37) 17,108 16,469Australia 10,310 9,869 (1,259) 39.43 1,354 39.66 45.01 (144) 10,166 9,819Europe 556 556 - - - - - - 556 556Total 72,133 68,356 (12,277) $27.25 10,931 $27.81 $30.09 3 71,849 67,012(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.(2) Excludes non-managed properties in the U.S. Office Fund and includes unconsolidated joint ventures.89

Additionally, for the year ended December 31, 2011, tenant improvements and leasing costs related toleasing activity that occurred averaged $38.12 per square foot, compared to $30.37 per square foot 2010.The following table presents the lease expiry profile of our office properties with the associated expiringaverage in-place net rents by region at December 31, 2011:(000’s sq. ft.)NetRentalAreaCurrentlyAvailableExpiring Leases2012 2013 2014 2015 2016 2017(000’s Net (000’s Net (000’s Net (000’s Net (000’s Net (000’ssq. ft.) Rent sq. ft.) Rent sq. ft.) Rent sq. ft.) Rent sq. ft.) Rent sq. ft.)NetRent2018 &Beyond(000’ssq. ft.)United States 44,019 3,851 3,027 $18 5,810 $31 3,171 $24 3,849 $20 2,036 $25 1,773 $26 20,502 $33Canada 17,108 639 435 28 1,798 23 439 31 1,680 26 1,809 26 625 29 9,683 29Australia 10,166 347 378 51 670 42 851 53 1,227 59 1,017 62 1,038 51 4,638 68Europe(1) 556 - - - - - 262 58 - - - - - - 294 62Total 71,849 4,837 3,840 $22 8,278 $30 4,723 $32 6,756 $29 4,862 $33 3,436 $34 35,117 $37Percentage of Total 100.0% 6.7% 5.3% 11.5% 6.6% 9.4% 6.8% 4.8% 48.9%(1) Does not include office assets held through interest in Canary Wharf.RetailIFRS Value – RetailNetRent2010:The following table presents IFRS Value of our retail properties by region as at December 31, 2011 and(US$ Millions) United States Australia Brazil Europe TotalDec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,2011 2010 2011 2010 2011 2010 2011 2010 2011 2010Retail properties $ - $ $ 388 $ 420 $1,882 $1,983 $- $279 $ 2,270 $ 2,682Equity accounted investments 4,099 1,014 - - 87 99 - 14 4,186 1,127Accounts receivable and other 183 178 19 21 461 330 - 22 663 5514,282 1,192 407 441 2,430 2,412 - 315 7,119 4,360Property-specific borrowings - - 185 194 1,011 1,262 - 254 1,196 1,710Accounts payable and other 51 1 - - 175 170 - 18 226 189Non-controlling interests 293 211 22 - 933 821 - - 1,248 1,032IFRS Value $3,938 $ 980 $ 200 $ 247 $ 311 $ 159 $- $43 $ 4,449 $ 1,429Specific 2011 major variances included the following:• IFRS Value in our retail portfolio increased by $3.0 billion to $4.4 billion at December 31, 2011from December 31, 2010, reflecting the investment of a further $1.7 billion in GGP in February2011, which increased our ownership to approximately 21%, as well as our share of increases in thefair value of GGP’s mall portfolio.• GGP opened 28 new anchor/big box stores in the United States totaling approximately 920,000square feet, three department stores totaling approximately 402,000 square feet, and had anadditional four department stores totaling approximately 516,000 square feet scheduled to open in2012 and 2013.• We invested approximately $170 million in our Brazilian retail operations in the second quarter of2011, increasing our ownership from 25% to 39%. In the fourth quarter of 2011, we soldapproximately 4% interest in the Brazilian retail operations for $39 million, after several assetswere sold. Additionally, during 2011, we recognized a fair value gain of $202 million reflecting90

etter than expected leasing market conditions and a 40-basis points decrease in discount ratesacross the portfolio. Carrying values in Brazil also reflect a 13% reduction in the currencyexchange rate from the end of 2010.• We disposed of our U.K. retail assets and two properties in New Zealand in the first quarter of2011.The details of property debt for our consolidated retail properties at December 31, 2011 are as follows:(US$ Millions) Weighted Average Rate Debt BalanceSecured Property DebtVariable rate 12.9% $ 1,196$ 1,196Current $ 171Non-current 1,025$ 1,196The details of retail property debt related to our equity accounted investment in GGP at December 31, 2011are as follows:(US$ Millions) Weighted Average Rate Debt Balance (1)Secured Property DebtFixed rate 5.5% 17,386Variable rate 3.3% 2,5565.2% $ 19,942Current $ 1,886Non-current 18,056$ 19,942(1) Represents GGP’s consolidated and proportionate share of unconsolidated U.S. property debt.91

Operating results – RetailThe following table presents the NOI, FFO, and Total Return of our retail properties by region for theyears ended December 31, 2011, 2010 and 2009:(US$ Millions) United States Australia Brazil Europe Total2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009 2011 2010 2009NOI (1) $ - $ - $ - $26$24$ 22 $ 111 $ 94 $ 67 $ 1 $12 $ 13 $ 138 $ 130 $ 102Equity accounted investments 224 - - - - - 7 1 - - - - 231 1 -Investment and other income - (5) - - - - 5 3 6 - - - 5 (2) 6224 (5) - 26 24 22 123 98 73 1 12 13 374 129 108Interest expense - - - 15 13 4 144 108 78 - 14 15 159 135 97Other operating costs - - - - - - - - 11 - - - - - 11Non-controlling interests 18 6 - - - - (13) (7) (19) 2 - - 7 (1) (19)FFO (1) 206 (11) - 11 11 18 (8) (3) 3 (1) (2) (2) 208 (5) 19Fair value changes 1,189 127 - 15 14 (71) 202 40 (62) (4) 11 (61) 1,402 192 (194)Realized gains - - - - - - 47 - - - - - 47 - -Non-controlling interests (93) (45) - - - - (158) (35) 47 1 - - (250) (80) 47Total valuation gains (losses) 1,096 82 - 15 14 (71) 91 5 (15) (3) 11 (61) 1,199 112 (147)Total Return (1) $1,302 $ 71 $ - $26$ 25 $ (53) $ 83 $ 2 $ (12) $ (4) $ 9 $ (63) $1,407 $ 107 $ (128)(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for reconciliation of NOI,FFO and Total Return to IFRS measures.NOI for the year ended December 31, 2011 compared with the prior year increased by 6%, primarily dueto the consolidation of the New Zealand Property Fund and income from Brazilian mall expansions.NOI for the year ended December 31, 2010 compared with the prior year increased by 27% as a result ofan increase in tenant sales and currency appreciation in Brazil which was offset by the disposition of an asset inAustralia.FFO for the year ended December 31, 2011 compared with the prior year increased by $213 millionwhich is primarily due to the company’s investment in GGP.FFO for the year ended December 31, 2010 compared with the prior year decreased by $24 million due toan increase in interest rates in Brazil and Australia and costs related to the recapitalization of GGP.Total Return for the year ended December 31, 2011 increased by $1.3 billion to $1.4 billion from$107 million in the prior year. The increase is a result of increase in FFO as mentioned above and increase invaluation gains which is primarily a result of compression of implied capitalization rates in the United States andthe decrease in discount and terminal capitalization rates in Brazil, as detailed in the table below. In addition werecorded realized gains from the sale of three properties in Brazil.Total Return for the year ended December 31, 2010 increased by $235 million to $107 million from($128) million in the prior year. The increase in valuation gains is a result of decrease in discount and terminalcapitalization rates as detailed in the table below. This was offset by the decrease in FFO as mentioned above.The key valuation metrics of our retail properties, including those within our equity accountedinvestments, are presented in the following table. The valuations are most sensitive to changes in the discount rateand timing or variability of cash flows. A 100-basis point change in the discount rate and terminal capitalizationrate would result in a change in our IFRS Value, as at December 31, 2011 after deducting non-controlling92

interests, of $681 million. Discount and capitalization rates have declined meaningfully in all of our principalregions, giving rise to appraisal gains.(US$ Millions)Dec. 31,2011United States (1) Australia Brazil Europe (1)Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31, Dec. 31,2010 2009 2011 2010 2009 2011 2010 2009 2011 2010Dec. 31,2009Discount rate 6.0% 6.7% - 9.8% 9.8% 9.8% 9.6% 10.0% 10.3% - 8.1% 8.1%Terminal cap rate n/a n/a - 8.9% 9.0% 9.1% 7.3% 7.3% 7.4% - n/a n/aInvestment horizon (years) n/a n/a - 10 10 10 10 10 10 - n/a n/a(1) The valuation method used by the United States and Europe is the direct capitalization method. The amounts presented as the discountrate relate to the implied capitalization rate. The terminal capitalization rate and investment horizon are not applicable.The following table presents key metrics relating to in-place leases of our retail property portfolio:Occupancy(%)December 31, 2011 December 31, 2010 December 31, 2009Avg. LeaseTerm(Years)Avg.“In Place” MarketRent RentOccupancy(%)Avg. LeaseTerm(Years)Avg.“In Place”RentMarketRentOccupancy(%)Avg. LeaseTerm (Years)Avg.“In Place”RentUnited States (1) 93.2% 5.1 $56.05 $55.87 92.9% 3.9 $55.09 $52.24 - - $ - $ -Australia 98.0% 7.4 10.14 10.86 96.7% 6.4 9.28 10.78 98.8% 7.4 8.97 10.28Europe - - - - 80.1% 12.1 23.57 12.52 91.0% 15.4 22.63 12.33Brazil 94.7% 6.8 52.50 51.15 94.3% 5.0 45.74 43.98 94.4% 5.0 37.13 35.97Average 93.4% 5.3 $54.08 $53.88 92.9% 4.2 $52.61 $49.80 95.2% 7.5 $14.20 $11.06(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.Our retail portfolio occupancy rate at December 31, 2011 was 93.4%, up from 92.9% at December 31,2010. Occupancy levels in our U.S. portfolio increased by 30 basis points from 92.9% at December 31, 2010 to93.2%, and the average initial rent on leases signed in 2011 was $61.45 per square foot, up 11.3% or $6.22 persquare foot as compared to the expiring rent on comparable leases.We use in-place rents for our retail segment as a measure of leasing performance, which is calculated on acash basis and consists of base minimum rent, plus reimbursements of common area costs, and real estate taxes.The following table presents leasing activity from December 31, 2010 to December 31, 2011:MarketRent(US $)Dec. 31, 2010 Dec. 31, 2011Year One AverageTotal ExpiringLeasing Leasing Acq. (Disp.) LeasableLeased (1) Expiries Rent Leasing Rent Rent Additions Area(000’s (000’s ($per (000’s ($per ($per (000’s (000’sSq.Ft.) Sq. Ft.) Sq.Ft.) Sq. Ft.) Sq.Ft.) Sq.Ft.) Sq. Ft.) Sq. Ft.)LeasableArea (1)(000’sSq.Ft.)Leased(000’sSq. Ft.)United States 67,237 62,463 (3,519) $56.68 4,082 $57.57 $63.22 (868) 66,369 62,158Australia 3,003 2,913 (49) 36.89 84 16.07 17.80 (259) 2,744 2,689Brazil 3,608 3,400 (390) 44.41 434 51.15 53.22 (539) 3,069 2,905Total 73,848 68,776 (3,958) $55.23 4,600 $56.21 $61.45 (1,666) 72,182 67,752(1) Has been restated to reflect the impact of remeasurements which are done annually in the first quarter.In addition, we incurred tenant allowances for our operating properties of $125 million for the year endedDecember 31, 2011 and $9 million during 2010.93

The following table presents the lease expiry profile of our retail properties with the associated expiringaverage in-place rents by region at December 31, 2011:(000’s sq.ft.)Expiring LeasesNet2012 2013 2014 2015 2016 2017 2018 & BeyondRentalArea AvailableCurrently (000’ssq. ft.) In-place (000’sRent sq. ft.) In-place (000’sRent sq. ft.) In-place (000’sRent sq. ft.) In-place (000’sRent sq. ft.) In-place (000’sRent sq. ft.) In-place (000’sRent sq. ft.) In-placeRentUnitedStates (1) 61,638 4,211 6,509 $54 6,334 $53 5,906 $53 5,363 $61 5,684 $64 5,076 $66 22,555 $59Australia 2,744 55 33 39 20 41 31 43 122 19 719 11 336 18 1,428 12Brazil 3,069 164 675 69 376 47 470 87 433 73 218 68 109 22 624 15Total 67,451 4,430 7,217 $55 6,730 $53 6,407 $55 5,918 $61 6,621 $58 5,521 $62 24,607 $55Percentageof Total 100.0% 6.6% 10.7% 10.0% 9.5% 8.8% 9.8% 8.2% 36.4%(1) Represents regional malls only and excludes leases on traditional anchor stores and specialty leasing license agreements.Multi-Family and IndustrialIFRS Value – Multi-Family and IndustrialThe following table presents IFRS Value of our multi-family and industrial segment:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Investment properties $ 971 $ 956Equity accounted investments 84 34Loans and notes receivable - 89Accounts receivable and other 57 691,112 1,148Property-specific borrowings 564 606Accounts payable and other liabilities 20 19Non-controlling interests 371 359IFRS Value $ 157 $ 164IFRS Value decreased over the period as a result of asset sales which was offset by further investmentsand fair value gains.Operating Results – Multi-Family and IndustrialThe following table presents the NOI, FFO and Total Return of our multi-family and industrial segmentfor the years ended December 31, 2011, 2010 and 2009:(US$ Millions) 2011 2010 2009NOI (1) $ 46 $ 22 $ 13Equity accounted investments (2) - -Investment and other income - (3) 244 19 15Interest and other expense 44 7 7Non-controlling interests 5 9 -FFO (1) $ (5) $ 3 $ 8Fair value changes 28 63 -Realized gains 11 52 -Non-controlling interests (22) (83) -Total valuation gains 17 32 -Total Return (1) $ 12 $ 35 $ 8(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for reconciliation of NOI,FFO and Total Return to IFRS measures.94

NOI increased over the periods due to increased investments in income producing assets, which wasoffset by increased borrowing costs. The decrease in total valuation was driven largely by an increase in thediscount rate and terminal cap rate and a reduction in realized gains from the sale of multi-family properties inthe United States.The key valuation metrics of these properties are presented in the following table. The valuations aremost sensitive to changes in the discount rate and timing or variability of cash flows.United StatesCanada(US$ Millions) Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009Discount rate 8.6% 8.4% 8.5% 8.7% 9.0% -Terminal cap rate 8.3% 6.6% 7.4% 7.7% 7.6% -Investment horizon (years) 10 10 10 10 10 -Opportunistic InvestmentsIFRS Value – Opportunistic InvestmentsThe following table presents IFRS Value of our opportunistic investments business:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Investment properties $ 912 $ 891Equity accounted investments 118 1Loans and notes receivable 994 1,450Accounts receivable and other 1,189 3483,213 2,690Property-specific borrowings 1,094 453Accounts payable and other liabilities 415 858Non-controlling interests 966 800IFRS Value $ 738 $ 579IFRS Value increased over the periods as a result of further investments and fair value gains in ouropportunity and finance funds.Our investment properties consist primarily of operating assets within the Brookfield sponsored realestate opportunity and finance funds. Accounts receivable and other includes a hotel operating property as atDecember 31, 2011.Loans and notes receivable reside primarily in our real estate finance funds. Included in loans and notesreceivable is $107 million (2010 - $110 million) of loans receivable in Euros of €83 million (2010 - €83 million).A summary of loans and notes receivable by collateral asset class is as follows:(US$ Millions) December 31, 2011 December 31, 2010Unpaid PrincipalBalancePercentage ofPortfolio (1)Unpaid PrincipalBalancePercentage ofPortfolio (1)Asset ClassHotel $ 401 40% $ 474 33%Office 593 60% 745 51%Retail - - 13 1%Nursing homes - - 166 11%Residential - - 52 4%Total collateralized $ 994 100% $ 1,450 100%(1) Represents percentage of collateralized loans.95

Our investments in loans and notes are evaluated for potential impairment, at a minimum on a quarterlybasis, by continually monitoring and performing a comprehensive review of the collateral properties underlyingeach individual loan. The review involves, but is not limited to, a detailed analysis of recent operating statementsin addition to rent rolls and other occupancy reports obtained from borrowers or loan reviewers. Further, wetypically communicate directly with third party sale, leasing or financing brokers to gather the latest informationon local markets or current market trends. By reviewing this information, we are able to make an informedassessment regarding the expected future performance of underlying collateral properties and therefore reach aconclusion about the credit quality and levels of risk associated with existing investments. As such, we do notgroup the loan portfolio by credit quality indicators based on the likelihood of loss.Property debt related to our opportunistic investments segment totaled $1.1 billion at December 31, 2011and had a weighted average interest rate of 3.9% and an average term to maturity of 4.7 years.Other liabilities consists primarily of obligations relating to our real estate finance funds which aresecured by loans and notes receivable having a carrying value of $0.7 billion (2010 - $1.0 billion).Operating Results – Opportunistic investmentsThe following table presents the NOI, FFO, and Total Return of our opportunistic investments businessfor the years ended December 31, 2011, 2010 and 2009:(US$ Millions) 2011 2010 2009NOI (1) $ 207 $ 192 $ 163Equity accounted investments 13 1 -Investment and other income (2) 4 1218 197 164Interest and other expense 69 82 65Non-controlling interests 88 54 58FFO (1) $ 61 $ 61 $ 41Fair value changes (24) (120) (89)Realized gains (losses) (11) 85 (11)Non-controlling interests 17 - 54Total valuation gains (losses) (18) (35) (46)Total Return (1) $ 43 $ 26 $ (5)(1) Refer to tables under “—Reconciliation of Performance Measures to IFRS Measures” below in this MD&A for reconciliation of NOI,FFO and Total Return to IFRS measures.NOI increased over the periods due to increased investments in income producing assets. FFO for theyear ended December 31, 2011 remained consistent compared with the prior year. FFO for the year endedDecember 31, 2010 compared with the same period in the prior year increased by $20 million to $61 million duethe an increase of cash flows from our opportunity and finance funds as a result of an increase in incomeproducing assets purchased in the period.In 2011 the increase in Total Return resulted from a decrease in the discount rate and terminal cap rate. Inaddition, 2010 included an impairment of $54 million from investments in our finance funds.In 2010, the increase in Total Return resulted from realized gains from the sale of assets in theopportunity funds which was offset by an increase in the discount rate and terminal cap rate.96

The key valuation metrics of these properties are presented in the following table. The valuations aremost sensitive to changes in the discount rate and timing or variability of cash flows.United States(US$ Millions) Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2009Discount rate 8.2% 8.7% 8.6%Terminal cap rate 8.1% 8.1% 7.7%Investment horizon (years) 10 10 10Income TaxesThe major components of income tax (expense) benefit include the following:(US$ Millions) Three months ended Mar. 31, 2012 2011Current income tax $ (56) $ (26)Deferred income tax (183) (45)Income tax expense $ (239) $ (71)(US$ Millions) Year ended Dec. 31, 2011 2010 2009Current income tax $ (164) $ (117) $ (60)Deferred income tax (275) 39 195Income tax (expense) benefit $ (439) $ (78) $ 135Our effective tax rate is different from Brookfield’s domestic statutory income tax rate due to thedifferences set out below:(US$ Millions) Three months ended Mar. 31, 2012 2011Statutory income tax rate 26% 28%Increase (reduction) in rate resulting from:Portion of income not subject to tax (14) (2)International operations subject to different tax rates 13 (13)Other - (1)Effective income tax rate 25% 12%(US$ Millions) Year ended Dec. 31, 2011 2010 2009Statutory income tax rate 28% 31% 33%Increase (reduction) in rate resulting from:Portion of income not subject to tax (12) (3) -International operations subject to different tax rates (4) (12) (20)Change in tax rates on temporary differences - - 3Increase in tax basis within flow through joint venture - (7) -Foreign exchange gains and losses - - 1Tax asset previously not recognized - (3) -Other (2) (2) (2)Effective income tax rate 10% 4% 15%97

Risk ManagementThe financial results of our business are impacted by the performance of our properties and variousexternal factors influencing the specific sectors and geographic locations in which we operate; macro-economicfactors such as economic growth, changes in currency, inflation and interest rates; regulatory requirements andinitiatives; and litigation and claims that arise in the normal course of business.Our property investments are generally subject to varying degrees of risk depending on the nature of theproperty. These risks include changes in general economic conditions (including the availability and costs ofmortgage funds), local conditions (including an oversupply of space or a reduction in demand for real estate inthe markets in which we operate), the attractiveness of the properties to tenants, competition from other landlordswith competitive space and our ability to provide adequate maintenance at an economical cost.Certain significant expenditures, including property taxes, maintenance costs, mortgage payments,insurance costs and related charges, must be made regardless of whether a property is producing sufficientincome to service these expenses. Certain properties are subject to mortgages which require substantial debtservice payments. If we become unable or unwilling to meet mortgage payments on any property, losses could besustained as a result of the mortgagee’s exercise of its rights of foreclosure or of sale. We believe the stabilityand long-term nature of our contractual revenues effectively mitigates these risks.We are affected by local, regional, national and international economic conditions and other events andoccurrences that affect the markets in which we own assets. A protracted decline in economic conditions willcause downward pressure on our operating margins and asset values as a result of lower demand for space.Substantially all of our properties are located in North America, Australia, Brazil and Europe. Aprolonged downturn in the economies of these regions would result in reduced demand for space and number ofprospective tenants and will affect the ability of our properties to generate significant revenue. If there is anincrease in operating costs resulting from inflation and other factors, we may not be able to offset such increasesby increasing rents.We are subject to risks that affect the retail environment, including unemployment, weak income growth,lack of available consumer credit, industry slowdowns and plant closures, consumer confidence, increasedconsumer debt, poor housing market conditions, adverse weather conditions, natural disasters and the need to paydown existing obligations. All of these factors could negatively affect consumer spending, and adversely affectthe sales of our retail tenants. This could have an unfavorable effect on our operations and our ability to attractnew retail tenants.The strategy of our opportunistic investment segment depends, in part, upon our ability to syndicate orsell participations in senior interests in our investments, either through capital markets collateralized debtobligation transactions or otherwise. If we cannot do so on terms that are favorable to us, we may not make thereturns we anticipate.Interest Rate and Financing RiskWe attempt to stagger the maturities of our mortgage portfolio, to the extent possible, evenly over a10-year time horizon. We believe that this strategy will allow us to manage interest rate risk most effectively. Wehave an on-going need to access debt markets to refinance maturing debt as it comes due. There is a risk thatlenders will not refinance such maturing debt on terms and conditions acceptable to us or on any terms at all. Ourstrategy to stagger the maturities of our mortgage portfolio attempts to mitigate our exposure to excessiveamounts of debt maturing in any one year.Approximately 51% of our outstanding commercial property debt at March 31, 2012 is floating rate debtcompared to 48% at December 31, 2011. This debt is subject to fluctuations in interest rates. A 100 basis point98

increase in interest rates on interest expense relating to our corporate and commercial floating rate debt wouldresult in an increase in an annual interest expense of $80 million. A 100 basis point increase in interest rates oninterest expense relating to fixed rate property debt due within one year would result in an increase in an annualinterest expense of $5 million. In addition, we have exposure to interest rates within our equity accountedinvestments. We have mitigated, to some extent, the exposure to interest rate fluctuations through interest ratederivative contracts. See “Derivative Financial Instruments” below in this MD&A.At March 31, 2012 we have a level of indebtedness of 54% of fair value of our portfolio of properties(2011 – 56%). It is our view that such level of indebtedness is conservative given the lending parameterscurrently existing in the real estate marketplace and the fair value of our assets, and based on this, we believe thatall debts will be financed or refinanced as they come due in the foreseeable future.Credit RiskCredit risk arises from the possibility that tenants may be unable to fulfill their lease commitments. Wemitigate this risk by ensuring that our tenant mix is diversified and by limiting our exposure to any one tenant.We also maintain a portfolio that is diversified by property type so that exposure to a business sector is lessened.As at March 31, 2012 no one office tenant represented more than 7.0% of total leasable area in our officesegment.The following list shows major tenants with over one million square feet of space in our office portfolioby leased area and their respective credit ratings and lease commitments as at March 31, 2012:TenantPrimary LocationCreditRating (1)Year ofExpiry (2)Total(000’sSq. Ft.)Sq. Ft.(%)Various Government Agencies All markets AA+/AAA Various 5,985 8.4%Bank of America/Merrill Lynch (3) Toronto/New York/Denver/Los Angeles A/A- Various 4,976 7.0%Wells Fargo/Wachovia Securities (4) New York A+ 2019 1,545 2.2%CIBC World Markets (5) Toronto/New York/Calgary A+ 2033 1,436 2.0%Suncor Energy Calgary BBB+ 2028 1,352 1.9%Century Link Denver Not Rated 2017 1,278 1.8%Kellogg Brown & Root Houston Not Rated 2030 1,268 1.8%Royal Bank of CanadaVancouver/Toronto/Calgary/New York/Los Angeles/Minneapolis AA- 2023 1,259 1.8%Bank of Montreal Calgary/Toronto A+ 2024 1,143 1.6%Total 20,242 28.5%(1) From Standard & Poor’s Rating Services, Moody’s Investment Services, Inc. or DBRS Limited. Reflects credit rating of tenant anddoes not reflect credit rating of any subtenants.(2) Reflects the year of maturity related to lease(s) beyond 2016 and is calculated for multiple leases on a weighted average basis based onsquare feet where practicable.(3) Bank of America/Merrill Lynch leases 4.6 million square feet in the World Financial Center, of which they occupy 2.7 million squarefeet with the balance being leased to various subtenants ranging in size up to 500,000 square feet. Of this 2.7 million square feet,1.9 million is in 4 World Financial Center, and 0.8 million square feet is in 2 World Financial Center. Of the total leased space,3.4 million square feet will expire in 2013.(4) Wells Fargo/Wachovia Securities leases 1.4 million square feet at One New York Plaza, of which they occupy 148,000 square feetwith the balance being leased to five subtenants ranging in size up to 756,000 square feet.(5) CIBC World Markets leases 1,094,000 square feet at 300 Madison Avenue in New York, of which they sublease 925,000 square feetto PricewaterhouseCoopers LLP.99

The following list reflects the ten largest tenants in our retail portfolio as at March 31, 2012. The largesttenant in our portfolio accounted for approximately 2.6% of minimum rents, tenant recoveries and other.Top Ten Largest TenantsPrimary DBAPercent ofMinimumRents, TenantRecoveriesand Other (%)Total (000’sSq. Ft.)Number ofLocationsLimited Brands, Inc. Victoria’s Secret, Bath & Body Works, PINK 2.6% 1,771 306Foot Locker, Inc. Foot Locker, Champs Sports, Footaction USA 2.6% 1,444 363The Gap, Inc. Gap, Banana Republic, Old Navy 2.5% 2,372 227Abercrombie & Fitch Stores, Inc. Abercrombie, Abercrombie & Fitch, Hollister, Gilly Hicks 1.9% 1,409 199Forever 21, Inc. Forever 21 1.8% 2,265 107Golden Gate Capital Express, J. Jill, Eddie Bauer 1.4% 1,183 144American Eagle Outfitters, Inc. American Eagle, Aerie, Martin + Osa 1.5% 921 162Luxottica Retail North AmericaInc. Lenscrafters, Sunglass Hut, Pearle Vision 1.4% 581 289Macy’s Inc. Macy’s, Bloomingdale’s 1.1% 20,881 135Genesco Inc. Journeys, Lids, Underground Station, Johnston & Murphy 1.1% 543 356Total 17.9% 33,370 2,288Our exposure to credit risk in respect of our other investments relates primarily to counterpartyobligations regarding loans and notes receivable. We assess the credit worthiness of each counterparty beforeentering into contracts and ensure that counterparties meet minimum credit quality requirements. We alsoendeavor to minimize counterparty credit risk through diversification, collateral arrangements, and other creditrisk mitigation techniques.Lease Roll-Over RiskLease roll-over risk arises from the possibility that we may experience difficulty renewing leases as theyexpire or in releasing space vacated by tenants upon early lease expiry. We attempt to stagger the lease expiryprofile so that we are not faced with disproportionate amounts of space expiring in any one year; approximately7.3% of our office leases and 9.1% of our retail leases mature annually over the next five years Excluding Bankof America/Merrill Lynch, our single largest office tenant, as of December 31, 2011 less than 7.3% of our officeleases mature annually over the next five years. We further mitigate this risk by maintaining a diversifiedportfolio mix by geographic location and by proactively leasing space in advance of its contractual expiry.Details of our lease expiry profile for our office and retail properties, by geography and in aggregate, areincluded elsewhere in this MD&A.Environmental RisksAs an owner of real property, we are subject to various federal, provincial, state and municipal lawsrelating to environmental matters. Such laws provide that we could be liable for the costs of removing certainhazardous substances and remediating certain hazardous locations. The failure to remove or remediate suchsubstances or locations, if any, could adversely affect our ability to sell such real estate or to borrow using suchreal estate as collateral and could potentially result in claims against us. We are not aware of any materialnoncompliance with environmental laws at any of our properties nor are we aware of any pending or threatenedinvestigations or actions by environmental regulatory authorities in connection with any of our properties or anypending or threatened claims relating to environmental conditions at our properties.We will continue to make the necessary capital and operating expenditures to ensure that we arecompliant with environmental laws and regulations. Although there can be no assurances, we do not believe thatcosts relating to environmental matters will have a materially adverse effect on our business, financial conditionor results of operations. However, environmental laws and regulations can change and we may become subject to100

more stringent environmental laws and regulations in the future, which could have an adverse effect on ourbusiness, financial condition or results of operations.Economic RiskReal estate is relatively illiquid. Such illiquidity may limit our ability to vary our portfolio promptly inresponse to changing economic or investment conditions. Also, financial difficulties of other property ownersresulting in distressed sales could depress real estate values in the markets in which we operate.Our commercial properties generate a relatively stable source of income from contractual tenant rentpayments. Continued growth of rental income is dependent on strong leasing markets to ensure expiring leasesare renewed and new tenants are found promptly to fill vacancies.Taking into account the current state of the economy, 2012 may not provide the same level of increases inrental rates on renewal as compared to prior years. We are, however, substantially protected against short-termmarket conditions, as most of our leases are long-term in nature with an average term of seven years.Insurance RiskWe maintain insurance on our properties in amounts and with deductibles that we believe are in line withwhat owners of similar properties carry. We maintain all risk property insurance and rental value coverage(including coverage for the perils of flood, earthquake and named windstorm).Foreign Exchange FluctuationsFor the year ended December 31, 2011, approximately 39% of our assets and 43% of our revenuesoriginated outside the United States and consequently are subject to foreign currency risk due to potentialfluctuations in exchange rates between these currencies and the U.S. dollar. To mitigate this risk, we attempt tomaintain a natural hedged position with respect to the carrying value of assets through debt agreementsdenominated in local currencies and, from time to time, supplemented through the use of derivative contracts asdiscussed under “—Derivative Financial Instruments”.The following table shows the impact of a 10% decrease in foreign exchange rates on net income andother comprehensive income:December 31, 2011 December 31, 2010 December 31, 2009(Millions) IFRS Value OCI Net Income IFRS Value OCI Net Income IFRS Value OCI Net IncomeCanadian Dollar C$ 935 $ (84) $ - C$ 820 $ (74) $ - C$ 1,032 $ (89) $ -Australian Dollar A$ 2,005 (186) - A$ 1,863 (173) - A$ 1,997 (163) -British Pound £ 641 (90) - £ 482 (69) - £ 255 (37) -Euro € 83 - (10) € 83 - (10) € 83 - (11)Brazilian Real R$ 586 (28) - R$ 265 (14) - R$ 223 (12) -Total $ (388) $ (10) $ (330) $ (10) $ (301) $ (11)Derivative Financial InstrumentsOur operating entities use derivative and non-derivative instruments to manage financial risks, includinginterest rate, commodity, equity price and foreign exchange risks. The use of derivative contracts is governed bydocumented risk management policies and approved limits. We do not use derivatives for speculative purposes.Our operating entities use the following derivative instruments to manage these risks:• foreign currency forward contracts to hedge exposures to Canadian Dollar, Australian Dollar andBritish Pound denominated investments in foreign subsidiaries and foreign currency denominatedfinancial assets;101

• interest rate swaps to manage interest rate risk associated with planned refinancings and existingvariable rate debt;• interest rate caps to hedge interest rate risk on certain variable rate debt; and• total return swaps on Brookfield Office Properties’ shares to economically hedge exposure tovariability in its share price under its deferred share unit plan.We also designate Canadian Dollar financial liabilities of certain of our operating entities as hedges of ournet investments in our Canadian operations.Interest Rate HedgingWe have derivatives outstanding that are designated as cash flow hedges of variability in interest ratesassociated with forecasted fixed rate financings and existing variable rate debt.As at March 31, 2012, we had derivatives with a notional amount of $1,241 million in place to fix rateson forecasted fixed rate financings with maturities between 2022 and 2024 at rates between 2.6% and 4.7%. As atDecember 31, 2011, we had derivatives with a notional amount of $1,599 million in place to fix rates onforecasted fixed rate financings with a maturity between 2014 and 2024. The hedged forecasted fixed ratefinancings are denominated in U.S. Dollars and Canadian Dollars.As at March 31, 2012, we had derivatives with a notional amount of $6,139 million in place to fix rateson existing variable rate debt at between 0.3% and 10.4% for debt maturities between 2012 and 2016. As atDecember 31, 2011, we had derivatives with a notional amount of $5,343 million in place to fix rates on existingvariable rate debt at between 0.3% and 9.9% for debt maturities between 2012 and 2016.The fair value of our outstanding interest rate derivative positions as at March 31, 2012 was a loss of$255 million (2011 – loss of $271 million). For the three months ended March 31, 2012 the amount of hedgeineffectiveness recorded in interest expense in connection with our interest rate hedging activities was notsignificant.Foreign Currency HedgingWe have derivatives designated as net investment hedges of our investments in foreign operating entities.As at March 31, 2012, we had hedged a notional amount of £45 million at £0.63/US$ and A$135 million atA$0.95/US$ using foreign currency forward contracts maturing between April and June of 2012. As atDecember 31, 2011, we had hedged a notional amount of £45 million at £0.64/US$ and A$135 million atA$0.98/US$ using foreign currency forward contracts maturing between January and March of 2012.The fair value of our outstanding foreign currency forwards as at March 31, 2012 is a gain of $3 million(2011 – loss of $4 million).In addition, as of March 31, 2012, we had designated C$750 million (2011 – C$903 million) of Canadiandollar financial liabilities as hedges of our net investment in Canadian operations.For the three months ended March 31, 2012, the amount of hedge ineffectiveness recorded in earnings inconnection with the company’s foreign currency hedging activities was not significant.102

Other DerivativesThe following other derivatives have been entered into to manage financial risks and have not beendesignated as hedges for accounting purposes.At March 31, 2012, we had a total return swap under which we received the return on a notional amountof 1.3 million BPO common shares in connection with BPO’s deferred share unit plan. The fair value of the totalreturn swap at March 31, 2012 was a gain of $4 million (2011 – gain of $2 million) and a gain of $2 million inconnection with the total return swap was recognized in general and administrative expense in the three monthsthen ended (2011 – loss of $17 million).At March 31, 2012, we had foreign exchange contracts outstanding to swap a €83 million notionalamount to GBP (2011 – €83 million). The fair value of these contracts as at March 31, 2012 was nil (2011 – nil).Related Party TransactionsIn the normal course of operations, we enter into various transactions on market terms with relatedparties, which have been measured at exchange value and are recognized in the financial statements. Thefollowing table summarizes transactions with related parties:(US$ Millions) Three months ended Mar. 31, 2012 2011Lease revenue $ 1 $ 1Interest income 13 18Management fees paid 5 9(US$ Millions) Year ended Dec. 31, 2011 2010 2009Lease revenue $ 2 $ 2 $ 2Interest income 101 71 17Interest expense 41 7 1Management fees paid 30 52 43Management fees received 15 5 -(US$ Millions) Balances outstanding as at Mar. 31, 2012 Dec. 31, 2011 Dec. 31, 2010BRPI promissory notes (1) $ 481 $470 $ –Loans receivable designated as FVTPL (2) 143 138 –Loans and notes receivable (3) 382 452 1,221Other current receivables 8 57 13Capitalized interest paid to Brookfield 5 40 39Property debt payable 30 79 128Other liabilities (4) 30 22 476(1) Included in notes receivable is $481 million (2011 - $470 million) related to unsecured promissory notes of C$480 million receivablefrom Brookfield Residential Properties Inc. (“BRPI”), a subsidiary of the parent company. Under the terms of a put agreement, theBusiness has the right to put up to $365 million of the promissory notes, at various dates beginning December 31, 2012, to Brookfieldfor cash proceeds equal to the outstanding principal amount.(2) Includes a senior unsecured note receivable from a subsidiary of Brookfield that matures on December 19, 2014. The principal andinterest payments on the note receivable are based on the returns of a reference debenture which is, in turn, secured by an equityinterest in a publicly traded real estate entity based in Australia. The debenture was not repaid on its scheduled maturity date and adefault notice was issued to the borrower demanding full repayment.(3) Includes Brookfield Office Properties’ $147 million receivable from Brookfield upon the earlier of Brookfield Office Properties’exercise of its option to convert its participating loan interests into direct ownership of the Australian portfolio or the maturity of theparticipating loan notes. Also included is Brookfield Office Properties’ $200 million loan receivable related to Brookfield’s ownershipof Brookfield Office Properties’ Class AAA Series E capital securities earning a rate of 108% of bank prime. In 2010, the balance alsoincluded Brookfield Office Properties’ $504 million loan receivable in cash collateralized total return swaps entered into withBrookfield bearing interest at a weighted average rate of LIBOR plus 2.9% and BREF’s $262 million loan receivable related to itsownership of Trizec debt bearing a weight average rate of LIBOR plus 2.8%.(4) In 2010, other liabilities included Brookfield Office Properties’ bridge facility payable to Brookfield which matured in November2011.103

Critical Accounting Policies, Estimates and JudgmentsThe discussion and analysis of our financial condition and results of operations is based upon thecarve-out financial statements, which have been prepared in accordance with IFRS. The preparation of financialstatements, in conformity with IFRS, requires management to make estimates and assumptions that affect thecarrying amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenues and expenses during the reporting period. Actualresults could differ from these estimates.Our most critical accounting policies are those that we believe are the most important in portraying ourfinancial condition and results of operations, and require the most subjectivity and estimates by our management.Investment PropertiesInvestment properties include commercial properties held to earn rental income and properties that arebeing constructed or developed for future use as investment properties. Commercial properties and commercialdevelopments are recorded at fair value, determined based on available market evidence, at the balance sheetdate. We determine the fair value of each investment property based upon, among other things, rental incomefrom current leases and assumptions about rental income from future leases reflecting market conditions at thebalance sheet date, less future cash flows in respect of such leases. Fair values are primarily determined bydiscounting the expected future cash flows, generally over a term of 10 years including a terminal value based onthe application of a capitalization rate to estimated year 11 cash flows. Active developments are measured usinga discounted cash flow model, net of costs to complete, as of the balance sheet date. Development sites in theplanning phases are measured using comparable market values for similar assets. Valuations of investmentproperties are most sensitive to changes in the discount rate and timing or variability of cash flows.The cost of commercial developments includes direct development costs, realty taxes and borrowing costsdirectly attributable to the development. Borrowing costs associated with direct expenditures on properties underdevelopment or redevelopment are capitalized. Borrowing costs are also capitalized on the purchase cost of a siteor property acquired specifically for development or redevelopment in the short-term but only where activitiesnecessary to prepare the asset for development or redevelopment are in progress. The amount of borrowing costscapitalized is determined first by reference to borrowings specific to the project, where relevant, and otherwiseby applying a weighted average cost of borrowings to eligible expenditures after adjusting for borrowingsassociated with other specific developments. Where borrowings are associated with specific developments, theamount capitalized is the gross cost incurred on those borrowings less any investment income arising on theirtemporary investment. Borrowing costs are capitalized from the commencement of the development until thedate of practical completion. The capitalization of borrowing costs is suspended if there are prolonged periodswhen development activity is interrupted. We consider practical completion to have occurred when the propertyis capable of operating in the manner intended by management. Generally this occurs upon completion ofconstruction and receipt of all necessary occupancy and other material permits. Where we have pre-leased spaceas of or prior to the start of the development and the lease requires us to construct tenant improvements whichenhance the value of the property, practical completion is considered to occur on completion of suchimprovements.Initial direct leasing costs we incur in negotiating and arranging tenant leases are added to the carryingamount of investment properties.U.S. Office FundOur interest in the U.S. Office Fund is held through an indirect interest in TRZ Holdings, an entity weoriginally established along with our joint venture partner, or the JV Partner, to acquire Trizec Properties Inc.Under the terms of a joint venture agreement, the JV Partner held an option, commencing January 2011 for ninemonths, to call certain properties sub-managed by the JV Partner in exchange for its equity interest in104

TRZ Holdings; in the event the JV Partner did not first exercise its option, we had an option, commencing in2013 for a period of 14 months, to put the JV Partner sub-managed properties to the JV Partner in redemption ofits interest in TRZ Holdings, all of which we refer to as the U.S. Office Fund Option.On August 9, 2011, the JV Partner exercised its option, redeeming its equity interest in TRZ Holdings inexchange for its sub-managed properties, and repaid the debt associated with those properties. Prior to theexercise of the U.S. Office Fund Option, we and the JV Partner had joint control over the strategic financial andoperating policy decisions of TRZ Holdings and it was accounted for as a jointly controlled entity following theequity method of accounting. Following the exercise of the U.S. Office Fund Option, we held an 82.72% equityinterest in TRZ Holdings and obtained control over the strategic financial and operating policy decisions of theentity. Accordingly, we have consolidated our interest in TRZ Holdings effective August 9, 2011 and recognizedthe assets, liabilities and non-controlling interests in TRZ Holdings at fair value as at that date in accordance withIFRS 3, “Business Combinations”.Canary Wharf Group plcWe have determined that, notwithstanding our 22% common equity interest, we do not exercisesignificant influence over Canary Wharf as we are not able to elect board members or otherwise influence thefinancial and operating decisions.General Growth Properties, Inc.We acquired an indirect interest in GGP together with a consortium of institutional investors through aseries of parallel investment vehicles. As of March 31, 2012, we held an indirect 21% interest in GGP and wereentitled to appoint three of the nine directors to GGP’s board. Brookfield and the consortium members haveentered into a voting agreement governing the combined investment in GGP wherein the members have jointcontrol over such investment and the consortium as a whole exercises significant influence over GGP.Accordingly, we accounted for the investment following the equity method of accounting.TaxationWe apply judgment in determining the tax rate applicable to our REIT operating entities and identifyingthe temporary differences related to such operating entities with respect to which deferred income taxes arerecognized. Deferred taxes related to temporary differences arising in the company’s REIT operating entities,joint ventures and associates are measured based on the tax rates applicable to distributions received by theinvestor entity on the basis that REITs can deduct dividends or distributions paid such that their liability forincome taxes is substantially reduced or eliminated for the year, and we intend that these entities will continue todistribute their taxable income and continue to qualify as REITs for the foreseeable future.We measure deferred income taxes associated with our investment properties based on our specificintention with respect to each asset at the end of the reporting period. Where we have a specific intention to sell aproperty in the foreseeable future, deferred taxes on the building portion of the investment property are measuredbased on the tax consequences following from the disposition of the property. Otherwise, deferred taxes aremeasured on the basis the carrying value of the investment property will be recovered substantially through use.Judgment is required in determining the manner in which the carrying amount of each investment property willbe recovered.We also make judgments with respect to the taxation of gains inherent in our investments in foreignsubsidiaries and joint ventures. While we believe that the recovery of our original investment in these foreignsubsidiaries and joint ventures will not result in additional taxes, certain unremitted gains inherent in thoseentities could be subject to foreign taxes depending on the manner of realization.105

Financial InstrumentsWe classify our financial instruments into categories based on the purpose for which the instrument wasacquired or issued, its characteristics and our designation of the instrument. The category into which we classifyfinancial instruments determines its measurement basis (e.g., fair value, amortized cost) subsequent to initialrecognition. We hold financial instruments that represent secured debt and equity interests in commercialproperties that are measured at fair value. Estimation of the fair value of these instruments is subject to theestimates and assumptions associated with valuation of investment properties. When designating derivatives incash flow hedging relationships, we make assumptions about the timing and amount of forecasted transactions,including anticipated financings and refinancings.Fair value is the amount that willing parties would accept to exchange a financial instrument based on thecurrent market for instruments with the same risk, principal and remaining maturity. The fair value of interestbearing financial assets and liabilities is determined by discounting the contractual principal and interestpayments at estimated current market interest rates for the instrument. Current market rates are determined byreference to current benchmark rates for a similar term and current credit spreads for debt with similar terms andrisk.Use of EstimatesThe company makes estimates and assumptions that affect carried amounts of assets and liabilities,disclosure of contingent assets and liabilities and the reported amount of earnings for the period. Actual resultscould differ from estimates. The estimates and assumptions that are critical to the determination of the amountsreported in the financial statements relate to the following:(i)Investment propertyWe determine the fair value of each operating property based upon, among other things, rental incomefrom current leases and assumptions about rental income from future leases reflecting market conditions at theapplicable balance sheet dates, less future cash outflows in respect of such leases. Fair values are primarilydetermined by discounting the expected future cashflows, generally over a term of 10 years including a terminalvalue based on the application of a capitalization rate to estimated year 11 cashflows. Certain operatingproperties are valued using a direct capitalization approach whereby a capitalization rate is applied to estimatedcurrent year cashflows. Developments properties under active development are also measured using a discountedcashflow model, net of costs to complete, as of the balance sheet date. Development sites in the planning phasesare measured using comparable market values for similar assets. In accordance with our policy, we measure ouroperating properties and development properties using valuations prepared by management. From time to time,we obtain valuations of selected operating properties and development properties prepared by qualified externalvaluation professionals in connection with financing transactions or for other purposes, and while managementconsiders the results of such valuations they do not form the basis of the company’s reported values.(ii)Financial instrumentsWe determine the fair value of our warrants to acquire common shares of GGP using a Black-Scholesoption pricing model wherein we are required to make estimates and assumptions regarding expected futurevolatility of GGP’s shares and the term of the warrants.We have certain financial assets and liabilities with embedded participation features related to the valuesof investment properties whose fair values are based on the fair values of the related properties.We hold other financial instruments that represent equity interests in investment property entities that aremeasured at fair value as these financial instruments are designated as fair value through profit or loss or106

available- for-sale. Estimation of the fair value of these instruments is also subject to the estimates andassumptions associated with investment properties.The fair value of interest rate caps is determined based on generally accepted pricing models using quotedmarket interest rates for the appropriate term. Interest rate swaps are valued at the present value of estimatedfuture cash flows and discounted based on applicable yield curves derived from market interest rates.Application of the effective interest method to certain financial instruments involves estimates andassumptions about the timing and amount of future principal and interest payments.Future Accounting Policy ChangesWe anticipate adopting each of the accounting policy changes below in the first quarter of the year forwhich the standard is applicable and are currently evaluating the impact of each.Financial InstrumentsIFRS 9, “Financial Instruments”, or IFRS 9, is a multi-phase project to replace IAS 39. IFRS 9 introducesnew requirements for classifying and measuring financial assets. In October 2010 the IASB reissued IFRS 9,incorporating new requirements on accounting for financial liabilities and carrying over from IAS 39 therequirements for de-recognition of financial assets and financial liabilities. In December 2011, the IASB issued“Mandatory Effective Date of IFRS 9 and Transition Disclosures”, which amended the effective date of IFRS 9to annual periods beginning on or after January 1, 2015, and modified the relief from restating comparativeperiods and the associated disclosures in IFRS 7. Early adoption is permitted. The IASB intends to expandIFRS 9 to add new requirements for impairment of financial assets measured at amortized cost and hedgeaccounting. On completion of these various phases, IFRS 9 will be a complete replacement of IAS 39.Consolidated Financial StatementsIFRS 10, “Consolidated Financial Statements”, or IFRS 10, establishes principles for the preparation ofan entity’s financial statements when it controls one or more other entities. The standard defines the principle ofcontrol and establishes control as the basis for determining which entities are consolidated in the financialstatements of the reporting entity. The standard also sets out the accounting requirements for the preparation ofconsolidated financial statements.Joint ArrangementsIFRS 11, “Joint Arrangements”, or IFRS 11, replaces the existing IAS 31, “Interests in Joint Ventures”(“IAS 31”). IFRS 11 requires that reporting entities consider whether a joint arrangement is structured through aseparate vehicle, as well as the terms of the contractual arrangement and other relevant facts and circumstances,to assess whether the venture is entitled to only the net assets of the joint arrangement (a “joint venture”) or to itsshare of the assets and liabilities of the joint arrangement (a “joint operation”). Joint ventures are accounted forusing the equity method, whereas joint operations are accounted for using proportionate consolidation.Disclosure Of Interests In Other EntitiesIFRS 12, “Disclosure of Interests in Other Entities”, or IFRS 12, applies to entities that have an interest ina subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. The standard requiresdisclosure of information that enables users of financial statements to evaluate: (i) the nature of, and risksassociated with interests in other entities; and (ii) the effects of those interests on our financial position, financialperformance and cash flows.107

Fair Value MeasurementIFRS 13, “Fair Value Measurement”, or IFRS 13, replaces the current guidance on fair valuemeasurement in IFRS with a single standard. The standard defines fair value, provides guidance on itsdetermination and requires disclosures about fair value measurements but does not change the requirementsabout the items that should be measured and disclosed at fair value.Income TaxesAmendments to IAS 12, “Income Taxes”, or IAS 12 effective January 1, 2012 are applicable to themeasurement of deferred tax liabilities and deferred tax assets where investment property is measured using thefair value model in IAS 40, “Investment Property”. The amendments introduce a rebuttable presumption that, forpurposes of determining deferred tax consequences associated with temporary differences relating to investmentproperties, the carrying amount of an investment property is recovered entirely through sale. This presumption isrebutted if the investment property is held within a business model whose objective is to consume substantiallyall of the economic benefits embodied in the investment property over time, rather than through sale. The parentcompany has determined that based on its business model, the rebuttable presumption introduced by theamendments to IAS 12 has been overcome and has continued to measure deferred taxes on the basis that thecarrying amount of investment properties will be recovered through use except where there is a specific plan tosell a property in the foreseeable future. Therefore, the amendments to IAS 12 did not have an impact on themeasurement of the company’s deferred tax liabilities.Reconciliation of Performance Measures to IFRS MeasuresThe following table provides a reconciliation of net income attributable to Brookfield to Total Return andFFO for the three months ended March 31, 2012 and 2011:(US$ Millions) Three months ended Mar. 31, 2012 2011Net income attributable to parent company $ 383 $ 337Add (deduct):Income tax expense (benefit) 439 78Non-controlling interest in the above (242) (33)Total Return 580 382Add (deduct):Fair value (gains) losses (287) (303)Realized gains (78) 2Share of equity accounted fair value adjustments (1) (353) (57)Income tax expense (200) (7)Non-controlling interest in the above 479 119FFO $141 $ 136(1) Represents fair value gains (losses) related to equity accounted investments.The following table provides a reconciliation of net income attributable to Brookfield to Total Return andFFO for the years ended December 31, 2011, 2010 and 2009:(US$ Millions) Year ended December 31, 2011 2010 2009Net income attributable to parent company $ 2,323 $1,026 $(477)Add (deduct):Income tax expense (benefit) 439 78 (135)Non-controlling interest in the above (162) (19) 29Total Return 2,600 1,085 (583)Add (deduct):Fair value (gains) losses (1,112) (574) 887Realized gains (365) (250) (39)Share of equity accounted fair value adjustments (1) (1,612) (561) 710Non-controlling interest in the above 1,065 726 (584)FFO $ 576 $ 426 $ 391(1) Represents fair value gains (losses) related to equity accounted investments.108

The components of NOI for the three months ended March 31, 2012 and 2011 are as follows:Three months ended Mar. 31, 2012 2011(US$ Millions)RevenuefromoperationsOperatingexpensesPropertyNOIRevenuefromoperationsOperatingexpensesPropertyNOIOffice $ 572 $ 230 $ 342 $ 409 $ 167 $ 242Retail 42 13 29 46 20 26Multi-Family and Industrial 19 8 11 39 27 12Opportunistic Investments 90 63 27 70 32 38$ 723 $ 314 $ 409 $ 564 $ 246 $ 318The components of NOI for the years ended December 31, 2011, 2010 and 2009 are as follows:Year ended Dec. 31, 2011 2010 2009(US$ Millions)RevenuefromoperationsOperatingexpensesPropertyNOIRevenuefromoperationsOperatingexpensesPropertyNOIRevenuefromoperationsOperatingexpensesPropertyNOIOffice $ 1,909 $ 793 $ 1,116 $ 1,521 $ 615 $ 906 $ 1,456 $ 610 $ 846Retail 193 55 138 199 69 130 187 85 102Multi-Family andIndustrial 108 62 46 54 32 22 25 12 13OpportunisticInvestments 379 172 207 328 136 192 251 88 163$ 2,589 $ 1,082 $ 1,507 $ 2,102 $ 852 $ 1,250 $ 1,919 $ 795 $ 1,124Proportionate Summary Financial InformationWe use the proportionate share of our interests in GGP and other jointly controlled entities and equityaccounted investments as a key performance measure. Management views this measure as relevant indemonstrating the company’s ability to manage the underlying economics of the related investments, includingthe financial performance and cash flows. This presentation also depicts the extent to which the underlying assetsare leveraged, which is an important component of risk management and enhancing shareholder returns. Thefollowing tables present our condensed carve-out balance sheet and income statement on a consolidated and on aproportionate basis. The proportionate financial information represents our carve-out financial statements on anadjusted basis to present our equity accounted investments and our share of net earnings (losses) from equityaccounted investments on a proportionately consolidated basis at our ownership percentage of the relatedinvestment (referred to as “proportionate interest”). We view our proportionate interest in GGP at 38%, whichconsists of our interests of 21% and those of our institutional partners of 17% who together with Brookfield ledthe recapitalization of GGP in 2010. We view our proportionate interest in our various jointly controlled entitiesand other equity accounted investments at our direct ownership interest of the related investments as Brookfieldhas invested in these entities independent of institutional partners. Fund partners’ interests representnon-controlling interests of our various co-investors in Brookfield led funds and investments.109

The following table presents a reconciliation of our condensed consolidated balance sheet to ourcondensed proportionate balance sheet as at March 31, 2012:ProportionateLess: Equity(US$ Millions) Consolidated GGP Other JVs Accounted Investments TotalAssetsInvestment properties $ 28,138 $ 13,941 $ 4,713 $ - $ 46,792Equity accounted investments 7,466 - - (7,466) -Loans and notes receivable 1,644 - - - 1,644Other assets 3,801 1,120 387 - 5,308Total assets $ 41,049 $ 15,061 $ 5,100 $ (7,466) $ 53,744LiabilitiesProperty debt $ 15,266 $ 7,198 $ 1,745 $ - $ 24,209Capital securities 862 - - - 862Other liabilities 2,322 975 97 - 3,394Total liabilities 18,450 8,173 1,842 - 28,465Equity in net assetsFund partners’ interests 3,407 2,582 98 - 6,087Other non-controlling interests 6,617 - - - 6,617IFRS Value 12,575 4,306 3,160 (7,466) 12,575Total equity in net assets 22,599 6,888 3,258 (7,466) 25,279Total liabilities and equity in net assets $ 41,049 $ 15,061 $ 5,100 $ (7,466) $ 53,744The following table presents our condensed proportionate balance sheet by segment as at March 31, 2012:(US$ Millions) Office RetailMulti-Family& IndustrialOpportunisticInvestmentsAssetsInvestment properties $ 27,437 $ 17,187 $ 1,143 $ 1,025 $ 46,792Loans and notes receivable 673 - - 971 1,644Other assets 2,164 1,911 72 1,161 5,308Total assets $ 30,274 $ 19,098 $ 1,215 $ 3,157 $ 53,744LiabilitiesProperty debt $ 13,654 $ 8,882 $ 723 $ 950 $ 24,209Capital securities 862 - - - 862Other liabilities 1,636 1,360 30 368 3,394Total liabilities 16,152 10,242 753 1,318 28,465Equity in net assetsFund partners’ interests 637 4,053 323 1,074 6,087Other non-controlling interests 6,617 - - - 6,617IFRS Value 6,868 4,803 139 765 12,575Total equity in net assets 14,122 8,856 462 1,839 25,279Total liabilities and equity in net assets $ 30,274 $ 19,098 $ 1,215 $ 3,157 $ 53,744Total110

The following table presents a reconciliation of our condensed consolidated income statement to ourcondensed proportionate income statement for the three months ended March 31, 2012:(US$ Millions) Proportionate Less: EquityThree months ended Mar. 31, 2012 Consolidated GGP Other JVs Accounted Investments TotalNOI $ 409 $ 211 $ 62 $ - $ 682Equity accounted FFO 89 - - (89) -Investment and other income 39 1 - - 40537 212 62 (89) 722Interest expense 246 97 25 - 368General and administrative expense 21 20 - - 41Depreciation and amortization 39 2 - - 41Fund partners’ interests in above (8) 41 - - 33Other non-controlling interests in above 98 - - - 98FFO 141 52 37 (89) 141Fair value gains, net 287 457 63 - 807Share of equity accounted fair value gains 353 - - (353) -Realized gains 78 1 - - 79Income tax expense (239) (1) - - (240)Fund partners’ interests in above (103) (167) - - (270)Other non-controlling interests in above (134) - - - (134)Net income attributable to parent company $ 383 $ 342 $ 100 $ (442) $ 383The following table presents our condensed proportionate income statement by segment for the threemonths ended March 31, 2012:(US$ Millions)Three months ended Mar. 31, 2012 Office RetailMulti-Family& IndustrialOpportunisticInvestmentsNOI $ 386 $ 257 $ 12 $ 27 $ 682Investment and other income 33 4 - 3 40419 261 12 30 722Interest expense 191 145 8 24 368General and administrative expense 21 20 - - 41Depreciation and amortization 7 2 - 32 41Fund partners’ interests in above 6 44 3 (20) 33Other non-controlling interests in above 98 - - - 98FFO 96 50 1 (6) 141Fair value gains, net 281 461 (16) 81 807Realized gains (losses) 42 5 (3) 35 79Income tax expense (78) (139) - (23) (240)Fund partners’ interests in above - (198) 13 (85) (270)Other non-controlling interests in above (134) - - - (134)Net income (loss) attributable to parent company $ 207 $ 179 $ (5) $ 2 $ 383Total111

The following table presents a reconciliation of our condensed consolidated income statement to ourcondensed proportionate income statement for the year ended December 31, 2011:(US$ Millions) Proportionate Less: EquityYear ended December 31, 2011 Consolidated GGP Other JVs Accounted Investments TotalNOI $ 1,507 $ 958 $ 408 $ - $ 2,873Equity accounted FFO 492 - - (492) -Investment and other income 177 27 1 - 2052,176 985 409 (492) 3,078Interest expense 977 450 114 - 1,541General and administrative expense 84 126 27 - 237Depreciation and amortization 20 7 - - 27Fund partners’ interests in above 144 178 - - 322Other non-controlling interests in above 375 - - - 375FFO 576 224 268 (492) 576Fair value gains, net 1,112 1,949 435 - 3,496Share of equity accounted fair value gains 1,612 - - (1,612) -Realized gains 365 9 - - 374Income tax expense (439) (1) - - (440)Fund partners’ interests in above (331) (780) - - (1,111)Other non-controlling interests in above (572) - - - (572)Net income attributable to parent company $ 2,323 $1,401 $ 703 $ (2,104) $ 2,323The following table presents our condensed proportionate income statement by segment for the yearended December 31, 2011:(US$ Millions)Year ended December 31, 2011 Office RetailMulti-Family& IndustrialOpportunisticInvestmentsNOI $ 1,509 $ 1,100 $ 44 $ 220 $ 2,873Investment and other income 173 34 - (2) 2051,682 1,134 44 218 3,078Interest expense 821 608 41 71 1,541General and administrative expense 110 126 3 (2) 237Depreciation and amortization 19 8 - - 27Fund partners’ interests in above 47 182 5 88 322Other non-controlling interests in above 373 2 - - 375FFO 312 208 (5) 61 576Fair value gains (losses) 1,319 2,173 28 (24) 3,496Realized gains 318 56 11 (11) 374Income tax expense (334) (87) - (19) (440)Fund partners’ interests in above (82) (1,033) (22) 26 (1,111)Other non-controlling interests in above (574) 2 - - (572)Net income attributable to parent company $ 959 $ 1,319 $ 12 $ 33 $ 2,323Total5.B. LIQUIDITY AND CAPITAL RESOURCESThe capital of our business consists of property debt, capital securities, other secured and unsecured debtand equity. Our objectives when managing this capital are to maintain an appropriate balance between holding asufficient amount of capital to support our operations and to reduce our weighted average cost of capital, and toimprove the returns on equity through value enhancement initiatives and the consistent monitoring of the balancebetween debt and equity financing. As at March 31, 2012, the recorded values of capital totaled $39 billion(December 31, 2011 - $38 billion). Our principal liquidity needs for the next year are to:• fund recurring expenses;• meet debt service requirements;112

• fund those capital expenditures deemed mandatory, including tenant improvements;• fund current development costs not covered under construction loans;• fund investing activities which could include discretionary capital expenditures; and• fund property acquisitions.We plan to meet these needs with one or more of the following:• cash flows from operations;• construction loans;• creation of new funds;• proceeds from sales of assets;• proceeds from sale of non-controlling interests in subsidiaries; and• credit facilities and refinancing opportunities.We attempt to maintain a level of liquidity to ensure we are able to react to investment opportunitiesquickly and on a value basis. Our primary sources of liquidity consist of cash and undrawn committed creditfacilities, as well as cash flow from operating activities. In addition, we structure our affairs to facilitatemonetization of longer-duration assets through financings, co-investor participations or refinancings. Ouroperating entities also generate liquidity by accessing capital markets on an opportunistic basis. The followingtable summarizes the various sources of cash flows of our operating entities which supplement our liquidity.(US$ Millions) Three months ended Mar. 31, 2012 2011Cash flow from operating activities $ 211 $ 163Borrowings 782 466Proceeds from asset sales 393 432Loans and notes receivable collected 115 92Contributions from parent company 169 20Loan receivable collected from parent company 108 2Contributions from non-controlling interest 104 115$ 1,882 $ 1,290(US$ Millions) Year ended Dec. 31, 2011 2010 2009Cash flow from operating activities $ 1,611 $ 810 $ 166Borrowings 2,976 1,635 2,374Proceeds from asset sales 1,638 913 98Loans and notes receivable collected 744 302 228Proceeds from equity installment receivable 121 - -Contributions from parent company 307 358 769Loan receivable collected from parent company 658 - -Distributions from equity accounted investments - 316 -Contributions from non-controlling interest 667 1,038 1,024$ 8,722 $ 5,372 $ 4,659We seek to increase income from our existing properties by maintaining quality standards for ourproperties that promote high occupancy rates and support increases in rental rates while reducing tenant turnoverand related retenanting costs, and by controlling operating expenses. Consequently, we believe our revenue,113

along with proceeds from financing activities, will continue to provide the necessary funds to cover our shorttermliquidity needs. However, material changes in the factors described above may adversely affect our net cashflows.Most of our borrowings are in the form of long term asset-specific financings with recourse only to thespecific assets. Limiting recourse to specific assets ensures that poor performance within one area should notcompromise our ability in and of itself to finance the balance of our operations. A summary of our debt profilefor each of our office and retail segments are included elsewhere in this MD&A.At March 31, 2012, Brookfield Office Properties had a floating rate bank credit facility of $660 millionwhich matures in March 2014. Additionally, one of its subsidiaries has bilateral agreements with a number ofCanadian chartered banks for an aggregate floating rate bank credit facility of C$125 million, the terms of whichextend to June 2014. At March 31, 2012, the balances drawn on these facilities totaled $381 million.Our operating entities are subject to limited covenants in respect of their corporate debt and were incompliance with all such covenants at March 31, 2012. Our operating subsidiaries are also in compliance with allcovenants and other capital requirements related to regulatory or contractual obligations of material consequenceto us.In addition, see Item 7.B. “Major Shareholders and Related Party Transactions — Related PartyTransactions — Relationship with Brookfield — Preferred Shares of Certain Holding Entities”>. For adescription of our

Given the small amount of new office development that occurred over the last decade and the near totaldevelopment halt during the global financial crisis, we see an opportunity to advance our development inventoryin the near term in response to demand we are seeing in our major markets. In addition, we continue to repositionand redevelop existing retail properties, in particular, a number of the highest performing shopping centers inthe U.S.5.E. OFF-BALANCE SHEET ARRANGEMENTSWe do not have any off-balance sheet arrangements that have or are reasonably likely to have a materialcurrent or future effect on our financial condition, changes in financial condition, revenues or expenses, results ofoperations, liquidity, capital expenditures or capital resources that is material to investors.5.F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONSThe following table summarizes our significant contractual obligations as of December 31, 2011:(US$ Millions)Payments Due By PeriodTotal Less than 1 Year 2 –3 years 4 – 5 Years After 5 YearsProperty and other secured debt $ 15,598 $ 1,433 $ 6,812 $ 2,063 $ 5,290Capital securities 994 150 392 452 -Other financial liabilities 1,170 1,170 - - -Interest expense (1)Property and other secured debt 4,746 984 1,820 1,015 927Capital securities 152 49 72 31 -(1) Represents aggregate interest expense expected to be paid over the term of the obligations. Variable interest rate payments have beencalculated based on current rates.ITEM 6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES6.A. DIRECTORS AND SENIOR MANAGEMENTGovernanceAs required by law, our limited partnership agreement provides for the management and control of ourcompany by a general partner rather than a board of directors and officers. The BPY General Partner serves asour company’s general partner and has a board of directors. The BPY General Partner has no executive officers.The BPY General Partner has sole responsibility and authority for the central management and control of ourcompany, which is exercised through its board of directors.The following table presents certain information concerning the current board of directors of the BPYGeneral Partner:Name, Municipality of Residence andIndependence (1)Richard B. Clark, New York, United States(Not Independent)Steven J. Douglas, Mississauga, Canada(Not Independent)Jeffrey M. Blidner, Toronto, Canada(Not Independent)Brett M. Fox, Old Bethpage, United States(Not Independent)AgePosition with theBPY General PartnerPrincipal Occupation52 Director Chief Executive Officer of Brookfield’sglobal property group44 Director Chief Financial Officer of Brookfield’sglobal property group64 Director Senior Managing Partner of BrookfieldAsset Management40 Director General Counsel of Brookfield’s globalproperty group(1) The mailing addresses for the directors are set forth under Item 7.A. “Major Shareholders and Related Party Transactions — MajorShareholders”.115

It is intended that prior to completion of the spin off, the board of directors will be expanded to sevenmembers, a majority of whom will be independent. Set forth below is biographical information for the BPYGeneral Partner’s current directors.Richard B. Clark. Mr. Clark is the Chief Executive Officer of Brookfield’s global property group and hasbeen Chief Executive Officer of Brookfield Office Properties since 2002. He was President and Chief ExecutiveOfficer of Brookfield Office Properties’ U.S. operations from 2000-2002; and prior to that held seniormanagement positions for Brookfield Office Properties and its predecessor companies including Chief OperatingOfficer, Executive Vice President and Director of Leasing. Mr. Clark is on the Executive Committee of theNational Association of Real Estate Trusts and the Real Estate Board of New York and is the Former Chairmanof the Real Estate Roundtable Tax Policy Advisory Committee. Mr. Clark sits on the board of directors of GGPon behalf of Brookfield Asset Management and does not sit on any other external corporate boards.Steven J. Douglas. Mr. Douglas is the Chief Financial Officer of Brookfield’s global property group.Mr. Douglas was GGP’s Executive Vice President and Chief Financial Officer from July 2010 to December2011. From 2009 to July 2010, Mr. Douglas served as president of Brookfield Office Properties. Mr. Douglas hasbeen a key member of the Brookfield team for more than 16 years, serving in a variety of senior positions atBrookfield Office Properties and Brookfield Asset Management. From 2003 to 2006, he was Chief FinancialOfficer of Falconbridge Limited. From 1996 until 2003, Mr. Douglas served as Chief Financial Officer ofBrookfield Office Properties. Mr. Douglas joined Brookfield Office Properties from Ernst & Young.Mr. Douglas received his Bachelor of Commerce degree from Laurentian University and is a CharteredAccountant.Jeffrey M. Blidner. Mr. Blidner is a Senior Managing Partner of Brookfield Asset Management and isresponsible for strategic planning and transaction execution. Mr. Blidner is also a director of BrookfieldInfrastructure Partners L.P., Chairman and a director of Brookfield Renewable Energy Partners L.P. andChairman and a director of Rouse.Brett M. Fox. Mr. Fox is General Counsel of Brookfield’s global property group and is responsible forcertain corporate operations, compliance, administrative and legal functions. Mr. Fox has held various legal andcorporate roles since joining Brookfield in 2002. Prior to joining Brookfield, Mr. Fox was an associate at the lawfirm of Cahill Gordon & Reindel LLP. He holds a law degree from Fordham University School of Law and anundergraduate degree from Cornell University.Our ManagementThe Managers, wholly-owned subsidiaries of Brookfield Asset Management, will provide managementservices to us pursuant to our Master Services Agreement. Brookfield has built its property platform through theintegration of formative portfolio acquisitions and single asset transactions over several decades and throughoutall phases of the real estate investment cycle. Having invested over $19 billion of equity capital through realestate transactions since 1987, Brookfield has a track record of delivering compelling, risk-adjusted returns toinvestors through a variety of publicly-listed company and private partnership vehicles. The Managers’investment and asset management professionals are complemented by the depth of real estate investment andoperational expertise throughout our operating platforms which specialize in office, retail, multi-family andindustrial assets, generating significant and stable operating cash flows. Members of Brookfield’s seniormanagement and other individuals from Brookfield’s global affiliates are drawn upon to fulfill the Managers’obligations to provide us with management services under our Master Services Agreement.116

The following table presents certain information concerning the Chief Executive Officer and the ChiefFinancial Officer of our Managers:NameAgeYears ofExperienceYears atBrookfieldPositionwith one of the ManagersRichard B. Clark 52 31 28 Chief Executive OfficerSteven J. Douglas 44 18 18 Chief Financial OfficerMessrs. Clark and Douglas have substantial operational and transaction origination and executionexpertise, having put together numerous consortiums, partnerships and joint ventures for large complextransactions. They have also been integral in building and developing Brookfield’s real property platform. Seeabove for their biographical information.Immediately following the spin-off, it is anticipated that the directors and officers of the BPY GeneralPartner and our Managers and their associates, as a group, will beneficially own, directly or indirectly, orexercise control and direction over, our units representing in the aggregate less than 1% of our issued andoutstanding units on a fully exchanged basis.6.B. COMPENSATIONBecause our company is a newly formed partnership, the BPY General Partner has not previouslyprovided any compensation to its directors. Following the spin-off, the BPY General Partner plans to pay each ofits independent directors $100,000 per year for serving on its board of directors and various board committees.The BPY General Partner’s other directors are not expected to be compensated in connection with their boardservice. The BPY General Partner plans to pay the chairman of the audit committee an additional $20,000 peryear and the other members of the audit committee an additional $10,000 for serving in such positions.The BPY General Partner currently does not have any employees. Pursuant to the Master ServicesAgreement, the Managers will provide or arrange for other service providers to provide day-to-day managementand administrative services for our company, the Property Partnership and the Holding Entities. The fees payableto the Managers under our Master Services Agreement are set forth under Item 7.B. “Major Shareholders andRelated Party Transactions — Related Party Transactions — Our Master Services Agreement — ManagementFee”.Pursuant to our Master Services Agreement, members of Brookfield’s senior management and otherindividuals from Brookfield’s global affiliates are drawn upon to fulfill obligations under the Master ServicesAgreement. However, these individuals, including the Brookfield employees identified in the table under Item6.A. “Directors, Senior Management and Employees — Directors and Senior Management — OurManagement”, will not be compensated by our company or the BPY General Partner. Instead, they will continueto be compensated by Brookfield.6.C. BOARD PRACTICESBoard Structure, Practices and CommitteesThe structure, practices and committees of the BPY General Partner’s board of directors, includingmatters relating to the size and composition of the board of directors, the election and removal of directors,requirements relating to board action and the powers delegated to board committees, are governed by the BPYGeneral Partner’s bye-laws. The BPY General Partner’s board of directors is responsible for supervising themanagement, control, power and authority of the BPY General Partner except as required by applicable law orthe bye-laws of the BPY General Partner. The following is a summary of certain provisions of those bye-lawsthat affect our company’s governance.117

Size, Independence and Composition of the Board of DirectorsThe BPY General Partner’s board of directors may consist of between 3 and 11 directors or such othernumber of directors as may be determined from time to time by a resolution of the BPY General Partner’sshareholders and subject to its bye-laws. The board is currently set at four directors and it is intended that prior tocompletion of the spin-off, the board will be increased to seven directors and a majority of the directors of theBPY General Partner’s board of directors will be independent. In addition, the BPY General Partner’s bye-lawsprovide that not more than 50% of the directors (as a group) or the independent directors (as a group) may beresidents of any one jurisdiction (other than Bermuda and any other jurisdiction designated by the board ofdirectors from time to time).Election and Removal of DirectorsThe BPY General Partner’s board of directors is appointed by its shareholders and each of its currentdirectors will serve until the earlier of his or her death, resignation or removal from office. Vacancies on theboard of directors may be filled and additional directors may be added by a resolution of the BPY GeneralPartner’s shareholders or a vote of the directors then in office. A director may be removed from office by aresolution duly passed by the BPY General Partner’s shareholders. A director will be automatically removedfrom the board of directors if he or she becomes bankrupt, insolvent or suspends payments to his or her creditors,or becomes prohibited by law from acting as a director.Action by the Board of DirectorsThe BPY General Partner’s board of directors may take action in a duly convened meeting at which aquorum is present or by a written resolution signed by all directors then holding office. The BPY GeneralPartner’s board of directors will hold a minimum of four meetings per year. When action is to be taken at ameeting of the board of directors, the affirmative vote of a majority of the votes cast is required for any action tobe taken.Transactions Requiring Approval by the Nominating and Governance CommitteeThe BPY General Partner’s nominating and governance committee has approved a conflicts policy whichaddresses the approval and other requirements for transactions in which there is greater potential for a conflict ofinterest to arise. These transactions include:• the dissolution of our partnership;• any material amendment to our Master Services Agreement, our limited partnership agreement orthe Property Partnership’s limited partnership agreement;• any material service agreement or other arrangement pursuant to which Brookfield will be paid afee, or other consideration other than any agreement or arrangement contemplated by our MasterServices Agreement;• co-investments by us with Brookfield;• acquisitions by us from, and dispositions by us to, Brookfield;• any other material transaction involving us and Brookfield; and• termination of, or any determinations regarding indemnification under, our Master ServicesAgreement.Our conflicts policy requires the transactions described above to be approved by the BPY GeneralPartner’s nominating and governance committee. Pursuant to our conflicts policy, the BPY General Partner’s118

nominating and governance committee may grant approvals for any of the transactions described above in theform of general guidelines, policies or procedures in which case no further special approval will be required inconnection with a particular transaction or matter permitted thereby. The conflicts policy can be amended at thediscretion of the BPY General Partner’s nominating and governance committee. See Item 7.B. “MajorShareholders and Related Party Transactions — Related Party Transactions — Relationship with Brookfield —Conflicts of Interest and Fiduciary Duties”.Service ContractsThere are no service contracts with directors that provide benefit upon termination of office or services.Transactions in which a Director has an InterestA director who directly or indirectly has an interest in a contract, transaction or arrangement with theBPY General Partner, our company or certain of our affiliates is required to disclose the nature of his or herinterest to the full board of directors. Such disclosure may generally take the form of a general notice given to theboard of directors to the effect that the director has an interest in a specified company or firm and is to beregarded as interested in any contract, transaction or arrangement with that company or firm or its affiliates. Adirector may participate in any meeting called to discuss or any vote called to approve the transaction in whichthe director has an interest and no transaction approved by the board of directors will be void or voidable solelybecause the director was present at or participates in the meeting in which the approval was given provided thatthe board of directors or a board committee authorizes the transaction in good faith after the director’s interesthas been disclosed or the transaction is fair to the BPY General Partner and our company at the time it isapproved.Audit CommitteeThe BPY General Partner’s board of directors is required to maintain an audit committee that operatespursuant to a written charter. The audit committee will consist solely of independent directors and each membermust be financially literate. Not more than 50% of the audit committee members may be residents of any onejurisdiction (other than Bermuda and any other jurisdiction designated by the board of directors from time totime).The audit committee is responsible for assisting and advising the BPY General Partner’s board ofdirectors with respect to:• our accounting and financial reporting processes;• the integrity and audits of our financial statements;• our compliance with legal and regulatory requirements; and• the qualifications, performance and independence of our independent accountants.The audit committee is responsible for engaging our independent auditors, reviewing the plans and resultsof each audit engagement with our independent auditors, approving professional services provided by ourindependent accountants, considering the range of audit and non-audit fees charged by our independent auditorsand reviewing the adequacy of our internal accounting controls.Nominating and Governance CommitteeThe BPY General Partner’s board of directors is required to maintain at all times following the spin-off anominating and governance committee that operates pursuant to a written charter. The nominating and119

governance committee will consist solely of independent directors and not more than 50% of the nominating andgovernance committee members may be residents of any one jurisdiction (other than Bermuda and any otherjurisdiction designated by the board of directors from time to time).The nominating and governance committee has approved a conflicts policy which addresses the approvaland other requirements for transactions in which there is a greater potential for a conflict of interest to arise. Thenominating and governance committee may be required to approve any such transactions. See “— TransactionsRequiring Approval by the Nominating and Governance Committee”.The nominating and governance committee is responsible for approving the appointment by the sittingdirectors of a person to the office of director and for recommending a slate of nominees for election as directorsby the BPY General Partner’s shareholders. The nominating and governance committee is responsible forassisting and advising the BPY General Partner’s board of directors with respect to matters relating to the generaloperation of the board of directors, our company’s governance, the governance of the BPY General Partner andthe performance of its board of directors. The nominating and governance committee is responsible for reviewingand making recommendations to the board of directors of the BPY General Partner concerning the remunerationof directors and committee members and any changes in the fees to be paid pursuant to our Master ServicesAgreement.Indemnification and Limitations on LiabilityOur Limited Partnership AgreementThe laws of Bermuda permit the partnership agreement of a limited partnership, such as our company, toprovide for the indemnification of a partner, the officers and directors of a partner and any other person againstany and all claims and demands whatsoever, except to the extent that the indemnification may be held by thecourts of Bermuda to be contrary to public policy or to the extent that the laws of Bermuda prohibitindemnification against personal liability that may be imposed under specific provisions of the laws of Bermuda.The laws of Bermuda also permit a partnership to pay or reimburse an indemnified person’s expenses in advanceof a final disposition of a proceeding for which indemnification is sought. See Item 10.B. “AdditionalInformation — Memorandum and Articles of Association — Description of Our Units and Our LimitedPartnership Agreement — Indemnification; Limitations on Liability” for a description of the indemnificationarrangements in place under our limited partnership agreement.The BPY General Partner’s Bye-lawsThe laws of Bermuda permit the bye-laws of an exempted company, such as the BPY General Partner, toprovide for the indemnification of its officers, directors and shareholders and any other person designated by thecompany against any and all claims and demands whatsoever, except to the extent that the indemnification maybe held by the courts of Bermuda to be contrary to public policy or to the extent that the laws of Bermudaprohibit indemnification against personal liability that may be imposed under specific provisions of Bermudalaw, such as the prohibition under the Bermuda Companies Act 1981 to indemnify liabilities arising from fraudor dishonesty. The BPY General Partner’s bye-laws provide that, as permitted by the laws of Bermuda, it willpay or reimburse an indemnified person’s expenses in advance of a final disposition of a proceeding for whichindemnification is sought.Under the BPY General Partner’s bye-laws, the BPY General Partner is required to indemnify, to thefullest extent permitted by law, its affiliates, directors, officers, resident representative, shareholders andemployees, any person who serves on a governing body of the Property Partnership or any of its subsidiaries andcertain others against any and all losses, claims, damages, liabilities, costs or expenses (including legal fees andexpenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all claims,demands, actions, suits or proceedings, incurred by an indemnified person in connection with our company’s120

investments and activities or in respect of or arising from their holding such positions, except to the extent thatthe claims, liabilities, losses, damages, costs or expenses are determined to have resulted from the indemnifiedperson’s bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnifiedperson knew to have been unlawful. In addition, under the BPY General Partner’s bye-laws: (i) the liability ofsuch persons has been limited to the fullest extent permitted by law and except to the extent that their conductinvolves bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnifiedperson knew to have been unlawful; and (ii) any matter that is approved by the independent directors will notconstitute a breach of any duties stated or implied by law or equity, including fiduciary duties. The BPY GeneralPartner’s bye-laws require it to advance funds to pay the expenses of an indemnified person in connection with amatter in which indemnification may be sought until it is determined that the indemnified person is not entitled toindemnification.InsurancePrior to the completion of the spin-off, we intend to obtain insurance coverage under which the directorsof the BPY General Partner will be insured, subject to the limits of the policy, against certain losses arising fromclaims made against such directors by reason of any acts or omissions covered under the policy in theirrespective capacities as directors of the BPY General Partner, including certain liabilities under securities laws.The insurance will apply in certain circumstances where we may not indemnify the BPY General Partner’sdirectors and officers for their acts or omissions.Governance of the Property PartnershipInitially the board of directors of the Property General Partner will be identical to the board of directors ofthe BPY General Partner. It has substantially similar governance arrangements as the BPY General Partneralthough it will not establish an audit committee or a nominating and governance committee. However, theProperty General Partner’s bye-laws allow for alternate directors. A director of the Property General Partner mayby written notice to the secretary of the Property General Partner appoint any person, including another director,who meets any minimum standards that are required by applicable law to serve as an alternate director and toattend and vote in such director’s place at any meeting of the Property General Partner’s board of directors atwhich such director is not personally present and to perform any duties and functions and exercise any rights thatsuch director could perform or exercise personally.6.D. EMPLOYEESAs at December 31, 2011, our operating entities had approximately 6,000 employees. Our company doesnot currently have any senior management who carry out the management and activities of our company. TheManagers, wholly-owned subsidiaries of Brookfield Asset Management, will provide management services to uspursuant to our Master Services Agreement.6.E. SHARE OWNERSHIPSee Item 7.A. “Major Shareholders and Related Party Transactions — Major Shareholders”.121

ITEM 7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS7.A. MAJOR SHAREHOLDERSThe following table presents information regarding the beneficial ownership of our units prior to andimmediately after completion of the spin-off by each person or entity that we know beneficially owns or willbeneficially own 5% or more of our units, each director of the BPY General Partner and all of the BPY GeneralPartner’s directors as a group.Units OutstandingPrior to theSpin-Off andRelated TransactionsUnits OutstandingImmediately After theSpin-Off andRelated TransactionsName and Address Units Owned Percentage Units Owned PercentageBrookfield Asset Management Inc.Suite 300, Brookfield Place, 181 BayStreet, Toronto, Ontario M5J 2T3 900 (1) 100%(1)%BAM Investments Corp.Suite 300, Brookfield Place, 181 BayStreet, Toronto, Ontario M5J 2T3 — — %Partners LimitedSuite 300, Brookfield Place, 181 BayStreet, Toronto, Ontario M5J 2T3 — — %Richard B. Clarkc/o Brookfield Asset Management Inc.Three World Financial Center, 11th FloorNew York, NY 10281-1021 — — *%Steven J. Douglasc/o Brookfield Asset Management Inc.Three World Financial Center, 11th FloorNew York, NY 10281-1021 — — *%Jeffrey M. Blidnerc/o Brookfield Asset Management Inc.Suite 300, Brookfield Place, 181 Bay StreetToronto, Ontario M5J 2T3 — — *%Brett M. Foxc/o Brookfield Asset Management Inc.Three World Financial Center, 11th FloorNew York, NY 10281-1021 — — *%All directors as a group(4 persons) — — *%(1) Approximation assuming Brookfield exercises its redemption right attached to the Redemption-Exchange Units and our companyelects to purchase those Redemption-Exchange Units in exchange for units of our company.* Less than 1%.122

7.B. RELATED PARTY TRANSACTIONSRELATIONSHIP WITH BROOKFIELDBrookfield Asset ManagementBrookfield Asset Management is a global alternative asset manager with approximately $150 billion inassets under management. It has over a 100-year history of owning and operating assets with a focus on property,renewable power, infrastructure and private equity. Brookfield has a range of public and private investmentproducts and services. Brookfield Asset Management is listed on the NYSE under the symbol “BAM”, on theTSX under the symbol “BAM.A” and on the NYSE Euronext under the symbol “BAMA”.Brookfield believes its operating experience is an essential differentiating factor in its past ability togenerate significant risk-adjusted returns. In addition, Brookfield has demonstrated particular expertise insourcing and executing large-scale transactions across a wide spectrum of real estate sectors and geographies.As a global alternative asset manager, Brookfield brings a strong and proven corporate platformsupporting legal, tax, operations oversight, investor reporting, portfolio administration and other client servicesfunctions. Brookfield’s management team is multi-disciplinary, comprising investment and operationsprofessionals, each with significant expertise in evaluating and executing investment opportunities and investingon behalf of itself and institutional investors.Following the spin-off, we will continue to be an affiliate of Brookfield and have a number of agreementsand arrangements with Brookfield.While we believe that our ongoing relationship with Brookfield provides us with a unique competitiveadvantage as well as access to opportunities that would otherwise not be available to us, we operate verydifferently from an independent, stand-alone entity. We describe below this relationship as well as potentialconflicts of interest (and the methods for resolving them) and other material considerations arising from ourrelationship with Brookfield.Relationship AgreementOur company, the Property Partnership, the Holding Entities, the Managers and Brookfield AssetManagement have entered into an agreement, referred to as the Relationship Agreement, that governs aspects ofthe relationship among them. Pursuant to the Relationship Agreement, Brookfield Asset Management has agreedthat we will serve as the primary entity through which acquisitions of commercial property will be made byBrookfield Asset Management and its affiliates on a global basis.In the commercial property industry, it is common for assets to be owned through consortiums andpartnerships of institutional equity investors and owner/operators such as ourselves. Accordingly, an integral partof our strategy is to pursue acquisitions through consortium arrangements with institutional investors, strategicpartners or financial sponsors and to form partnerships to pursue acquisitions on a specialized or global basis.Brookfield Asset Management has a strong track record of leading such consortiums and partnerships andactively managing underlying assets to improve performance. Brookfield has also established and manages anumber of private investment entities, managed accounts, joint ventures, consortiums, partnerships andinvestment funds whose investment objectives include the acquisition of commercial property and Brookfieldmay in the future establish similar funds. Nothing in the Relationship Agreement will limit or restrict Brookfieldfrom establishing or advising these or similar entities or limit or restrict any such entities from carrying out anyinvestment. Brookfield Asset Management has agreed that it will offer our company the opportunity to take upBrookfield’s share of any investment through these consortium arrangements or by one of these entities thatinvolves the acquisition of commercial property that is suitable for us, subject to certain limitations.123

Under the terms of the Relationship Agreement, our company, the Property Partnership and the HoldingEntities have acknowledged and agreed that Brookfield carries on a diverse range of businesses worldwide,including the development, ownership and/or management of commercial property, and investing (and advisingon investing) in commercial property, or loans, debt instruments and other securities with underlying collateral orexposure to commercial property and that except as explicitly provided in the Relationship Agreement, theRelationship Agreement does not in any way limit or restrict Brookfield from carrying on its business.Our ability to grow depends in part on Brookfield identifying and presenting us with acquisitionopportunities. Brookfield’s commitment to us and our ability to take advantage of opportunities is subject to anumber of limitations such as our financial capacity, the suitability of the acquisition in terms of the underlyingasset characteristics and its fit with our strategy, limitations arising from the tax and regulatory regimes thatgovern our affairs and certain other restrictions. See Item 3.D. “Key Information — Risk Factors — RisksRelating to Our Relationship with Brookfield”. Under the terms of the Relationship Agreement, our company,the Property Partnership and the Holding Entities have acknowledged and agreed that, subject to providing us theopportunity to participate on the basis described above, Brookfield may pursue other business activities andprovide services to third parties that compete directly or indirectly with us. In addition, Brookfield hasestablished or advised, and may continue to establish or advise, other entities that rely on the diligence, skill andbusiness contacts of Brookfield’s professionals and the information and acquisition opportunities they generateduring the normal course of their activities. Our company, the Property Partnership and the Holding Entities haveacknowledged and agreed that some of these entities may have objectives that overlap with our objectives or mayacquire commercial property that could be considered appropriate acquisitions for us, and that Brookfield mayhave financial incentives to assist those other entities over us. If any of the Managers determines that anopportunity is not suitable for us, Brookfield may still pursue such opportunity on its own behalf. Our company,the Property Partnership and the Holding Entities have further acknowledged and agreed that nothing in theRelationship Agreement will limit or restrict: (i) Brookfield’s ability to make any investment recommendation ortake any other action in connection with its public securities business; (ii) Brookfield from investing in any loansor debt securities or from taking any action in connection with any loan or debt security notwithstanding that theunderlying collateral is comprised of or includes commercial property provided that the original purpose of theinvestment was not to acquire a controlling interest in such property; or (iii) Brookfield from acquiring orholding an investment of less than 5% of the outstanding shares of a publicly traded company or from carryingout any other investment in a company or real estate portfolio where the underlying assets do not principallyconstitute commercial property. Due to the foregoing, we expect to compete from time to time with otheraffiliates of Brookfield Asset Management or other third parties for access to the benefits that we expect torealize from Brookfield Asset Management’s involvement in our business.In the event of the termination of our Master Services Agreement, the Relationship Agreement would alsoterminate, including Brookfield’s commitments to provide us with acquisition opportunities, as described above.Under the Relationship Agreement, our company, the Property Partnership and the Holding Entities haveagreed that none of Brookfield nor any affiliate, director, officer, employee, contractor, agent, advisor, member,partner, shareholder or other representative of Brookfield, will be liable to us for any claims, liabilities, losses,damages, costs or expenses (including legal fees) arising in connection with the business, investments andactivities in respect of or arising from the Relationship Agreement, except to the extent that the claims, liabilities,losses, damages, costs or expenses are determined to have resulted from the person’s bad faith, fraud, willfulmisconduct or gross negligence, or in the case of a criminal matter, action that the person knew to have beenunlawful. The maximum amount of the aggregate liability of Brookfield, or any of its affiliates, or of anydirector, officer, employee, contractor, agent, advisor, member, partner, shareholder or other representative ofBrookfield, will be equal to the amounts previously paid in the two most recent calendar years by the ServiceRecipients pursuant to our Master Services Agreement.124

Other ServicesBrookfield may provide services to our operating entities which are outside the scope of our MasterServices Agreement under arrangements that are on market terms and conditions and pursuant to whichBrookfield will receive fees. The services that may be provided under these arrangements include financialadvisory, property management, facilities management, development, relocation services, construction activities,marketing or other services.Preferred Shares of Certain Holding EntitiesBrookfield holds $750 million of redeemable and retractable preferred shares of one of our HoldingEntities newly formed under the laws of the Province of Ontario, which it received as partial consideration forcausing the Property Partnership to acquire substantially all of Brookfield Asset Management’s commercialproperty operations. The preferred shares are entitled to receive a cumulative preferential dividend equal to5.75% of their redemption value as and when declared by the board of directors of the Holding Entity until thefifth anniversary of their issuance, after which the preferred shares will be entitled to receive a cumulativepreferential dividend equal to 5.0% plus the prevailing yield for 5-year U.S. Treasury Notes. We are notpermitted to draw on our credit facility with Brookfield in order to fund a redemption or retraction of thepreferred shares. The preferred shares will be entitled to vote with the common shares of the Holding Entity andwill have an aggregate of 1% of the votes to be cast in respect of the Holding EntityIn addition, Brookfield has provided $5 million of working capital to each of the other three HoldingEntities (or wholly-owned subsidiaries thereof), for a total of $15 million, through a subscription for preferredshares of such Holding Entities or subsidiaries, as applicable. These preferred shares are entitled to receive acumulative preferential cash dividend equal to 5% as and when declared by the board of directors of theapplicable Holding Entity or subsidiary and are redeemable at the option of the applicable Holding Entity orsubsidiary, subject to certain limitations, at any time after the twentieth anniversary of their issuance. Thepreferred shares will be entitled to vote with the common shares of the applicable Holding Entity or subsidiaryand will have an aggregate of 1% of the votes to be cast in respect of any applicable Holding Entity or subsidiary.Credit FacilityPrior to the consummation of the spin-off, we expect to enter into a three-year unsecured revolving creditfacility with Brookfield that will provide borrowings on a revolving basis of up to $500 million, which will beused for working capital purposes. The credit facility will be guaranteed by our company, the PropertyPartnership and each of the Holding Entities. We expect that no amounts will be drawn as of the date of the spinoff.The credit facility is expected to bear interest at a rate per annum equal to LIBOR plus 2.75%. The creditfacility will require us to maintain compliance with a ratio of total debt to total capitalization as well as maintaina minimum tangible net worth and will contain other restrictions on the ability of the borrowers and theguarantors to, among other things, incur liens, engage in certain mergers and consolidations, transact withaffiliates, enter into hedging arrangements, and incur guarantees in respect of such hedging arrangements.Brookfield intends to syndicate the commitments under such facility to other lenders and, in connection withthe syndication of such commitments, the terms of such facility may change.Redemption-Exchange MechanismAt any time after two years from the date of the spin-off, the holders of Redemption-Exchange Units ofthe Property Partnership will have the right to require the Property Partnership to redeem all or a portion of theRedemption-Exchange Units for either (a) cash in an amount equal to the market value of one of our unitsmultiplied by the number of units to be redeemed (subject to certain adjustments) or (b) such other amount ofcash may be agreed by the relevant holder and the Property Partnership, subject to our company’s right to acquire125

such interests (in lieu of redemption) in exchange for our units. See Item 10.B. “Additional Information —Memorandum and Articles of Association — Description of the Property Partnership Limited PartnershipAgreement — Redemption-Exchange Mechanism”. Taken together, the effect of the redemption right and theright of exchange is that the holders of Redemption-Exchange Units will receive our units, or the value of suchunits, at the election of our company. Should we determine not to exercise our right of exchange, cash required tofund a redemption of Redemption-Exchange Units will likely be financed by a public offering of our units.Registration Rights AgreementOur company has entered into a customary registration rights agreement with Brookfield pursuant towhich we have agreed that, upon the request of Brookfield, our company will file one or more registrationstatements to register for sale under the U.S. Securities Act of 1933, as amended, or one or more prospectuses toqualify the distribution in Canada of, any of our units held by Brookfield (including units of our companyacquired pursuant to the Redemption-Exchange Mechanism). Under the registration rights agreement, ourcompany will not be required to file a U.S. registration statement or a Canadian prospectus unless Brookfieldrequests that units having a value of at least $50 million be registered or qualified. In the registration rightsagreement, we have agreed to pay expenses in connection with such registration and sales, except for anyunderwriting discounts or commissions, which will be borne by the selling unitholder, and to indemnifyBrookfield for material misstatements or omissions in the registration statement and/or prospectus.Equity Enhancement and Incentive DistributionsProperty GP LP, a wholly-owned subsidiary of Brookfield Asset Management, is entitled to receiveequity enhancement distributions and incentive distributions from the Property Partnership as a result of itsownership of the general partnership interest in the Property Partnership. Property GP LP will receive quarterlyequity enhancement distributions equal to 0.3125% of the amount by which our company’s total capitalizationvalue exceeds an initial reference value determined based on the market capitalization immediately following thespin-off, subject to adjustment as described under “Additional Information — Memorandum and Articles ofAssociation — Description of the Property Partnership Limited Partnership Agreement — Distributions”.In addition, the Property GP LP will receive incentive distributions calculated in increments based on theamount by which quarterly distributions on the limited partnership units of the Property Partnership exceedspecified target levels as set forth in the Property Partnership’s limited partnership agreement. See Item 10.B.“Additional Information — Memorandum and Articles of Association — Description of the Property PartnershipLimited Partnership Agreement — Distributions”.The Property GP LP may, at its sole discretion, elect to reinvest equity enhancement distributions andincentive distributions in exchange for Redemption-Exchange Units.To the extent that any Holding Entity or any operating entity pays to Brookfield any comparableperformance or incentive distribution, the amount of any future incentive distributions will be reduced in anequitable manner to avoid duplication of distributions.General Partner DistributionsPursuant to our limited partnership agreement, the BPY General Partner is entitled to receive a generalpartner distribution equal to 0.2% of the total distributions of our company.Pursuant to the limited partnership agreement of the Property Partnership, Property GP LP is entitled toreceive a general partner distribution from the Property Partnership equal to a share of the total distributions ofthe Property Partnership in proportion to the Property GP LP’s percentage interest in the Property Partnershipwhich, immediately following the spin-off, will be equal to 1% of the total distributions of the Property126

Partnership. See Item 10.B. “Additional Information — Memorandum and Articles of Association — Descriptionof the Property Partnership Limited Partnership Agreement — Distributions”.Distribution Reinvestment PlanFollowing the spin-off, we intend to adopt a distribution reinvestment plan for holders of our unitsresident in Canada. We may in the future expand our distribution reinvestment plan to include holders of ourunits resident in the United States. The Property Partnership will also have a distribution reinvestment plan.Brookfield has advised our company that it may from time to time reinvest distributions it receives from theProperty Partnership in the Property Partnership’s distribution reinvestment plan. See Item 10.F. “AdditionalInformation — Dividends and Paying Agents — Distribution Reinvestment Plan”.Indemnification ArrangementsSubject to certain limitations, Brookfield and its directors, officers, agents, subcontractors, contractors,delegates, members, partners, shareholders and employees generally benefit from indemnification provisions andlimitations on liability are included in our limited partnership agreement, the BPY General Partner’s bye-laws, theProperty Partnership’s limited partnership agreement, our Master Services Agreement and other arrangements withBrookfield. See Item 7.B. “Major Shareholders and Related Party Transactions — Related Party Transactions — OurMaster Services Agreement”, Item 10.B. “Additional Information — Memorandum and Articles of Association —Description of Our Units and Our Limited Partnership Agreement — Indemnification; Limitations of Liability” andItem 10.B. “Additional Information — Memorandum and Articles of Association — Description of the PropertyPartnership Limited Partnership Agreement — Indemnification; Limitations of Liability”.Licensing AgreementOur company and the Property Partnership have each entered into a licensing agreement with Brookfieldpursuant to which Brookfield has granted a non-exclusive, royalty-free license to use the name “Brookfield” andthe Brookfield logo. Other than under this limited license, we do not have a legal right to the “Brookfield” nameand the Brookfield logo. Brookfield Asset Management may terminate the licensing agreement immediatelyupon termination of our Master Services Agreement and it may be terminated in the circumstances describedunder Item 4.B. “Information on the Company — Business Overview — Intellectual Property”.Conflicts of Interest and Fiduciary DutiesOur organizational and ownership structure and strategy involve a number of relationships that may giverise to conflicts of interest between our company and our unitholders, on the one hand, and Brookfield, on theother hand. In particular, conflicts of interest could arise, among other reasons, because:• in originating and recommending acquisition opportunities, Brookfield has significant discretion todetermine the suitability of opportunities for us and to allocate such opportunities to us or to itselfor third parties;• because of the scale of typical commercial property acquisitions and because our strategy includescompleting acquisitions through consortium or partnership arrangements with pension funds andother financial sponsors, we will likely make co-investments with Brookfield and Brookfieldsponsoredfunds or Brookfield-sponsored or co-sponsored consortiums and partnerships involvingthird party investors to whom Brookfield will owe fiduciary duties, which it does not owe to us;• the same professionals within Brookfield’s organization who are involved in acquisitions that aresuitable for us are responsible for the consortiums and partnerships referred to above, as well ashaving other responsibilities within Brookfield’s broader asset management business. Limits on the127

availability of such individuals will likewise result in a limitation on the availability of acquisitionopportunities for us;• there may be circumstances where Brookfield will determine that an acquisition opportunity is notsuitable for us because of the fit with our acquisition strategy, limits arising due to regulatory or taxconsiderations, limits on our financial capacity or because of the immaturity of the target assets andBrookfield is entitled to pursue the acquisition on its own behalf rather than offering us theopportunity to make the acquisition;• where Brookfield has made an acquisition, it may transfer it to us at a later date after the assetshave been developed or we have obtained sufficient financing;• our relationship with Brookfield involves a number of arrangements pursuant to which Brookfieldprovides various services, access to financing arrangements and originates acquisitionopportunities, and circumstances may arise in which these arrangements will need to be amended ornew arrangements will need to be entered into;• as our arrangements with Brookfield were effectively determined by Brookfield in the context ofthe spin-off, they may contain terms that are less favorable than those which otherwise might havebeen negotiated between unrelated parties;• Brookfield is generally entitled to share in the returns generated by our operations, which couldcreate an incentive for it to assume greater risks when making decisions than it otherwise would inthe absence of such arrangements;• Brookfield is permitted to pursue other business activities and provide services to third parties thatcompete directly with our business and activities without providing us with an opportunity toparticipate, which could result in the allocation of Brookfield’s resources, personnel and acquisitionopportunities to others who compete with us;• Brookfield does not owe our company or our unitholders any fiduciary duties, which may limit ourrecourse against it; and• the liability of Brookfield and its directors is limited under our arrangements with them, and wehave agreed to indemnify Brookfield and its directors against claims, liabilities, losses, damages,costs or expenses which they may face in connection with those arrangements, which may leadthem to assume greater risks when making decisions than they otherwise would if such decisionswere being made solely for its own account, or may give rise to legal claims for indemnificationthat are adverse to the interests of our unitholders.With respect to transactions in which there is greater potential for a conflict of interest to arise, the BPYGeneral Partner may be required to seek the prior approval of its nominating and governance committee pursuantto a conflicts policy that has been approved by its nominating and governance committee. These transactionsinclude: (i) the dissolution of our partnership; (ii) any material amendment to our Master Services Agreement,our limited partnership agreement or the Property Partnership’s limited partnership agreement; (iii) any materialservice agreement or other arrangement pursuant to which Brookfield will be paid a fee, or other considerationother than any agreement or arrangement contemplated by our Master Services Agreement; (iv) co-investmentsby us with Brookfield; (v) acquisitions by us from, and dispositions by us to, Brookfield; (vi) any other materialtransaction involving us and Brookfield; and (vii) termination of, or any determinations regardingindemnification under, our Master Services Agreement. Pursuant to our conflicts policy, the BPY GeneralPartner’s nominating and governance committee may grant prior approvals for any of these transactions in theform of general guidelines, policies or procedures in which case no further special approval will be required in128

connection with a particular transaction or matter permitted thereby. In certain circumstances, these transactionsmay be related party transactions for the purposes of, and subject to certain requirements of, MultilateralInstrument 61-101 — Protection of Minority Security Holders in Special Transactions, or MI 61-101. MI 61-101provides a number of circumstances in which a transaction between an issuer and a related party may be subjectto valuation and minority approval requirements. See “Canadian Securities Law Exemptions” below forapplication of MI 61-101 to our company.The conflicts policy states that conflicts be resolved based on the principles of transparency, third-partyvalidation and approvals. The policy recognizes the benefit to us of our relationship with Brookfield and ourintent to pursue a strategy that seeks to maximize the benefits from this relationship. The policy also recognizesthat the principal areas of potential application of the policy on an ongoing basis will be in connection with ouracquisitions and our participation in Brookfield led consortiums and partnership arrangements, together with anymanagement or service arrangements entered into in connection therewith or the ongoing operations of theunderlying operating entities.In general, the policy provides that acquisitions that are carried out jointly by us and Brookfield, or in thecontext of a Brookfield-led or co-led consortium or partnership be carried out on the basis that the considerationpaid by us be no more, on a per share or proportionate basis, than the consideration paid by Brookfield or otherparticipants, as applicable. The policy also provides that any fees or carried interest payable in respect of ourproportionate investment, or in respect of an acquisition made solely by us, must be credited in the mannercontemplated by the Property Partnership’s limited partnership agreement, where applicable, or that such fees orcarried interest must either have been negotiated with another arm’s length participant or otherwise demonstratedto be on market terms (or better). The policy generally provides that if the acquisition involves the purchase by usof an asset from Brookfield, or the participation in a transaction involving the purchase by us and Brookfield ofdifferent assets, that a fairness opinion or, in some circumstances, a valuation or appraisal by a qualified expertbe obtained. These requirements provided for in the conflicts policy are in addition to any disclosure, approval,or valuation requirements that may arise under applicable law.Our limited partnership agreement and the limited partnership agreement of the Property Partnershipcontain various provisions that modify the fiduciary duties that might otherwise be owed to us and ourunitholders. These duties include the duties of care and loyalty. In the absence of provisions in the limitedpartnership agreements of our company and the Property Partnership to the contrary, the duty of loyalty wouldgenerally prohibit the BPY General Partner and the Property General Partner from taking any action or engagingin any transaction as to which it has a conflict of interest. The limited partnership agreements of our companyand the Property Partnership each prohibit the limited partners from advancing claims that otherwise might raiseissues as to compliance with fiduciary duties or applicable law. For example, the agreements provide that theBPY General Partner, the Property General Partner and their affiliates do not have any obligation under thelimited partnership agreements of our company or the Property Partnership, or as a result of any duties stated orimplied by law or equity, including fiduciary duties, to present business or investment opportunities to ourcompany, the Property Partnership, any Holding Entity or any other holding entity established by us. They alsoallow affiliates of the BPY General Partner and Property General Partner to engage in activities that maycompete with us or our activities. In addition, the agreements permit the BPY General Partner and the PropertyGeneral Partner to take into account the interests of third parties, including Brookfield, when resolving conflictsof interest.These modifications to the fiduciary duties are detrimental to our unitholders because they restrict theremedies available for actions that might otherwise constitute a breach of fiduciary duty and permit conflicts ofinterest to be resolved in a manner that is not always in the best interests of our company or the best interests ofour unitholders. We believe it is necessary to modify the fiduciary duties that might otherwise be owed to us andour unitholders, as described above, due to our organizational and ownership structure and the potential conflictsof interest created thereby. Without modifying those duties, the ability of the BPY General Partner and theProperty General Partner to attract and retain experienced and capable directors and to take actions that we129

elieve are necessary for the carrying out of our business would be unduly limited due to their concern aboutpotential liability.Canadian Securities Law ExemptionsMI 61-101 provides a number of circumstances in which a transaction between an issuer and a relatedparty may be subject to valuation and minority approval requirements. An exemption from such requirements isavailable when the fair market value of the transaction is not more than 25% of the market capitalization of theissuer. Our company intends to apply for exemptive relief from the requirements of MI 61-101 that, subject tocertain conditions, would permit it to be exempt from the minority approval and valuation requirements fortransactions that would have a value of less than 25% of our company’s market capitalization if Brookfield’sindirect equity interest in our company, through its ownership of Redemption-Exchange Units, were included inthe calculation of our company’s market capitalization. As a result, the 25% threshold above which the minorityapproval and valuation requirements would apply would be increased to include the indirect interest in ourcompany held by Brookfield through its ownership of the Redemption-Exchange Units of the PropertyPartnership. See Item 7.B. “Major Shareholders and Related Party Transactions — Related Party Transactions —Relationship with Brookfield — Conflicts of Interest and Fiduciary Duties” above.OUR MASTER SERVICES AGREEMENTThe Service Recipients have entered into a Master Services Agreement pursuant to which the Managershave agreed to provide or arrange for other service providers to provide management and administration servicesto our company and the other Service Recipients.The following is a summary of certain provisions of our Master Services Agreement and is qualified in itsentirety by reference to all of the provisions of the agreement. Because this description is only a summary of ourMaster Services Agreement, it does not necessarily contain all of the information that you may find useful. Wetherefore urge you to review our Master Services Agreement in its entirety. Copies of our Master ServicesAgreement will be available electronically on the website of the SEC at www.sec.gov and on our SEDAR profileat www.sedar.com and will be made available to our unitholders as described under Item 10.C. “AdditionalInformation — Material Contracts” and Item 10.H. “Documents on Display”.Appointment of the Managers and Services RenderedUnder our Master Services Agreement, the Service Recipients have appointed the Managers, as theservice providers, to provide or arrange for the provision by an appropriate service provider of the followingservices:• causing or supervising the carrying out of all day-to-day management, secretarial, accounting,banking, treasury, administrative, liaison, representative, regulatory and reporting functions andobligations;• providing overall strategic advice to the Holding Entities including advising with respect to theexpansion of their business into new markets;• supervising the establishment and maintenance of books and records;• identifying, evaluating and recommending to the Holding Entities acquisitions or dispositions fromtime to time and, where requested to do so, assisting in negotiating the terms of such acquisitions ordispositions;• recommending and, where requested to do so, assisting in the raising of funds whether by way ofdebt, equity or otherwise, including the preparation, review or distribution of any prospectus oroffering memorandum in respect thereof and assisting with communications support in connectiontherewith;130

• recommending to the Holding Entities suitable candidates to serve on the boards of directors or theequivalent governing bodies of our operating entities;• making recommendations with respect to the exercise of any voting rights to which the HoldingEntities are entitled in respect of our operating entities;• making recommendations with respect to the payment of dividends by the Holding Entities or anyother distributions by the Service Recipients, including distributions by our company to ourunitholders;• monitoring and/or oversight of the applicable Service Recipient’s accountants, legal counsel andother accounting, financial or legal advisors and technical, commercial, marketing and otherindependent experts, and managing litigation in which a Service Recipient is sued or commencinglitigation after consulting with, and subject to the approval of, the relevant board of directors or itsequivalent;• attending to all matters necessary for any reorganization, bankruptcy proceedings, dissolution orwinding up of a Service Recipient, subject to approval by the relevant board of directors or itsequivalent;• supervising the making of all tax elections, determinations and designations, the timely calculationand payment of taxes payable and the filing of all tax returns due, by each Service Recipient;• causing or supervising the preparation of the Service Recipients’ annual consolidated financialstatements, quarterly interim financial statements and other public disclosure;• making recommendations in relation to and effecting the entry into insurance of each ServiceRecipient’s assets, together with other insurances against other risks, including directors andofficers insurance as the relevant service provider and the relevant board of directors or itsequivalent may from time to time agree;• arranging for individuals to carry out the functions of principal executive, accounting and financialofficers for our company only for purposes of applicable securities laws;• providing individuals to act as senior officers of the Holding Entities as agreed from time to time,subject to the approval of the relevant board of directors or its equivalent;• advising the Service Recipients regarding the maintenance of compliance with applicable laws andother obligations; and• providing all such other services as may from time to time be agreed with the Service Recipientsthat are reasonably related to the Service Recipient’s day-to-day operations.The Managers’ activities are subject to the supervision of the board of directors or equivalent governingbody of the BPY General Partner and of each of the other Service Recipients, as applicable.The Managers may, from time to time, appoint an affiliate of Brookfield to act as a new Manager underour Master Services Agreement, effective upon the execution of a joinder agreement by the new Manager.Management FeePursuant to our Master Services Agreement, we pay a base management fee to the Managers equal to$12.5 million per quarter (subject to an annual escalation by a specified inflation factor beginning on January 1,2014). For any quarter in which the BPY General Partner determines that there is insufficient available cash topay the base management fee as well as the next regular distribution on our units, the Service Recipients mayelect to pay all or a portion of the base management fee in our units or in limited partnership units of the PropertyPartnership, subject to certain conditions.131

Reimbursement of Expenses and Certain TaxesWe will also reimburse the Managers for any out-of-pocket fees, costs and expenses incurred in theprovision of the management and administration services, including those of any third party. However, theService Recipients are not required to reimburse the Managers for the salaries and other remuneration of theirmanagement, personnel or support staff who carry out any services or functions for such Service Recipients oroverhead for such persons.The relevant Service Recipient will reimburse the Managers for all other out-of-pocket fees, costs andexpenses incurred in connection with the provision of the services including those of any third party. Suchout-of-pocket fees, costs and expenses are expected to include, among other things: (i) fees, costs and expensesrelating to any debt or equity financing; (ii) fees, costs and expenses incurred in connection with the generaladministration of any Service Recipient in respect of services; (iii) taxes, licenses and other statutory fees orpenalties levied against or in respect of a Service Recipient; (iv) amounts owed by the Managers underindemnification, contribution or similar arrangements; (v) fees, costs and expenses relating to our financialreporting, regulatory filings and investor relations and the fees, costs and expenses of agents, advisors and otherpersons who provide services to or on behalf of a Service Recipient; and (vi) any other fees, costs and expensesincurred by the Managers that are reasonably necessary for the performance by the Managers of their duties andfunctions under our Master Services Agreement.In addition, the Service Recipients are required to pay all fees, costs and expenses incurred in connectionwith the investigation, acquisition, holding or disposal of any asset or business that is made or that is proposed tobe made by us. Such additional fees, expenses and costs represent out-of-pocket costs associated with investmentactivities that will be undertaken pursuant to our Master Services Agreement.The Service Recipients are also required to pay or reimburse the Managers for all sales, use, value added,goods and services, harmonized sales, withholding or other taxes or customs duties or other governmentalcharges levied or imposed by reason of our Master Services Agreement or any agreement it contemplates, otherthan income taxes, corporation taxes, capital taxes or other similar taxes payable by the Managers, which arepersonal to the Managers.AssignmentOur Master Services Agreement may not be assigned by the Managers without the prior written consentof our company except that (i) the Managers may subcontract or arrange for the provision of services by anotherservice provider, provided that the Managers remain liable under the agreement, and (ii) any of the Managersmay assign the agreement to an affiliate or to a person that is its successor by way of merger, amalgamation oracquisition of the business of the Manager.TerminationOur Master Services Agreement continues in perpetuity until terminated in accordance with its terms.However, the Service Recipients may terminate our Master Services Agreement upon written notice oftermination from the BPY General Partner to the Managers if any of the following occurs:• any of the Managers defaults in the performance or observance of any material term, condition orcovenant contained in the agreement in a manner that results in material harm to the ServiceRecipients and the default continues unremedied for a period of 60 days after written notice of thebreach is given to such Manager;• any of the Managers engages in any act of fraud, misappropriation of funds or embezzlementagainst any Service Recipient that results in material harm to the Service Recipients;132

• any of the Managers is grossly negligent in the performance of its obligations under the agreementand such gross negligence results in material harm to the Service Recipients; or• certain events relating to the bankruptcy or insolvency of each of the Managers.The Service Recipients have no right to terminate for any other reason, including if any of the Managersor Brookfield experiences a change of control. The BPY General Partner may only terminate our Master ServicesAgreement on behalf of our company with the prior unanimous approval of the BPY General Partner’sindependent directors.Our Master Services Agreement expressly provides that our Master Services Agreement may not beterminated by the BPY General Partner due solely to the poor performance or the underperformance of any ofour operations.The Managers may terminate our Master Services Agreement upon written notice of termination to theBPY General Partner if any Service Recipient defaults in the performance or observance of any material term,condition or covenant contained in the agreement in a manner that results in material harm to the Managers andthe default continues unremedied for a period of 60 days after written notice of the breach is given to the ServiceRecipient. The Managers may also terminate our Master Services Agreement upon the occurrence of certainevents relating to the bankruptcy or insolvency of the Service Recipients.If our Master Services Agreement is terminated, the licensing agreement, the Relationship Agreement andany of Brookfield Asset Management’s obligations under the Relationship Agreement will also terminate.Indemnification and Limitations on LiabilityUnder our Master Services Agreement, the Managers have not assumed and do not assume anyresponsibility other than to provide or arrange for the provision of the services called for thereunder in good faithand will not be responsible for any action that the Service Recipients take in following or declining to follow theadvice or recommendations of the Managers. In addition, under our Master Services Agreement, the Managersand the related indemnified parties will not be liable to the Service Recipients for any act or omission, except forconduct that involved bad faith, fraud, willful misconduct, gross negligence or in the case of a criminal matter,conduct that the indemnified person knew was unlawful. The maximum amount of the aggregate liability of theManagers or any of their affiliates, or of any director, officer, agent, subcontractor, contractor, delegate, member,partner, shareholder, employee or other representative of the Managers or any of their affiliates, will be equal tothe amounts previously paid by the Service Recipients in respect of services pursuant to our Master ServicesAgreement in the two most recent calendar years. The Service Recipients have agreed to indemnify theManagers, their affiliates, directors, officers, agents, subcontractors, delegates, members, partners, shareholdersand employees to the fullest extent permitted by law from and against any claims, liabilities, losses, damages,costs or expenses (including legal fees) incurred by an indemnified person or threatened in connection with ourrespective businesses, investments and activities or in respect of or arising from our Master Services Agreementor the services provided by the Managers, except to the extent that the claims, liabilities, losses, damages, costsor expenses are determined to have resulted from the indemnified person’s bad faith, fraud or willful misconduct,gross negligence or in the case of a criminal matter, action that the indemnified person knew to have beenunlawful.Outside ActivitiesOur Master Services Agreement does not prohibit the Managers or their affiliates from pursuing otherbusiness activities or providing services to third parties that compete directly or indirectly with us.133

VOTING AGREEMENTSOur company and Brookfield have determined that it is advisable for our company to have control overthe Property General Partner, Property GP LP and the Property Partnership. Accordingly, the Voting Agreementprovides our company, through the BPY General Partner, with a number of rights.Pursuant to the Voting Agreement, any voting rights with respect to the Property General Partner,Property GP LP and the Property Partnership will be voted in favour of the election of directors approved by ourcompany. For these purposes, our company may maintain, from time to time, an approved slate of nominees orprovide direction with respect to the approval or rejection of any matter in the form of general guidelines,policies or procedures in which case no further approval or direction will be required. Any such generalguidelines, policies or procedures may be modified by our company in its discretion.In addition, pursuant to the Voting Agreement, any voting rights with respect to the Property GeneralPartner, Property GP LP and the Property Partnership will be voted in accordance with the direction of ourcompany with respect to the approval or rejection of the following matters: (i) any sale of all or substantially allof its assets; (ii) any merger, amalgamation, consolidation, business combination or other material corporatetransaction, except in connection with any internal reorganization that does not result in a change of control;(iii) any plan or proposal for a complete or partial liquidation or dissolution, or any reorganization or any case,proceeding or action seeking relief under any existing laws or future laws relating to bankruptcy or insolvency;(iv) any amendment to the limited partnership agreement of Property GP LP or the Property Partnership; or(v) any commitment or agreement to do any of the foregoing.In addition, pursuant to the Voting Agreement, Brookfield has agreed that it will not exercise its rightunder the limited partnership agreement for Property GP LP to remove the Property General Partner as thegeneral partner of Property GP LP except with the prior consent of our company.The Voting Agreement will be terminated: (i) at such time that our company ceases to own any limitedpartnership interest in the Property Partnership; (ii) at such time that the BPY General Partner (or its successorsor permitted assigns) involuntarily ceases to be the general partner of our company; (iii) at such time that that theProperty GP LP (or its successors or permitted assigns) involuntarily ceases to be the general partner of PropertyPartnership; or (iv) at such time that that the Property General Partner (or its successors or permitted assigns)involuntarily ceases to be the general partner of the Property GP LP. In addition, our company is permitted toterminate the Voting Agreement upon 30 days’ notice.The Voting Agreement also contains restrictions on transfers of the shares of the Property General Partnerand provides that Brookfield may transfer shares of the Property General Partner to any of its affiliates.Our company and Brookfield have also determined that it is advisable for our company to have controlover certain of the entities through which we hold our operating entities. Accordingly, our company has enteredinto voting agreements on substantially the same terms as the Voting Agreement, to provide us, through the BPYGeneral Partner, with voting rights over the entities through which we hold certain of our operating entities,including GGP, Rouse and certain of our private equity funds.INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERSTo the knowledge of our company, no current or former director, officer or employee of our company,nor any associate or affiliate of any of them, is or was indebted to our company at any time since its formation.At April 5, 2012, the aggregate indebtedness to Brookfield Office Properties, one of our operatingentities, or its subsidiaries of all officers, directors and employees and former officers, directors and employeesof Brookfield Office Properties and its subsidiaries was C$698,726. No loans have been extended since July 30,134

2002 to directors, executives or senior officers of Brookfield Office Properties. At March 30, 2012, Richard B.Clark, the CEO of Brookfield Office Properties, had an outstanding non-interest bearing loan from BrookfieldOffice Properties of C$698,726. The largest amount outstanding of such loan during the 12 months endedDecember 31, 2011 was C$698,726. Mr. Clark’s common shares purchased with the loan are held as security forthe loan.INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONSExcept as disclosed in this Form 20-F, no proposed director or senior officer of the BPY General Partneror the Managers or other insider of our company, nor any associate or affiliate of the foregoing persons, has anyexisting or potential material conflict of interest with our company, the Property Partnership or any of itssubsidiaries or interest in any material transaction involving our company, the Property Partnership or any of itssubsidiaries.7.C. INTERESTS OF EXPERTS AND COUNSELNot applicable.ITEM 8. FINANCIAL INFORMATION8.A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATIONSee Item 18. “Financial Statements”.8.B. SIGNIFICANT CHANGESIn April 2012, one of our company’s real estate finance funds obtained control over an operating resortproperty by foreclosing on a loan receivable. The carrying amount of the loan receivable at March 31, 2012 was$174 million.ITEM 9. THE OFFER AND LISTING9.A. OFFER AND LISTING DETAILSSee Item 9.C. “The Offer and Listing — Markets”.9.B. PLAN OF DISTRIBUTIONNot applicable.9.C. MARKETSThere is currently no public trading market for our units. However, our company intends to apply to listits units on the NYSE and the TSX under the symbol “BPY”. Listing of our units will be subject to our companymeeting the listing requirements of the NYSE and the TSX.9.D. SELLING SHAREHOLDERSNot applicable.9.E. DILUTIONNot applicable.135

9.F. EXPENSES OF THE ISSUENot applicable.ITEM 10. ADDITIONAL INFORMATION10.A. SHARE CAPITALSee Item 4.A. “History and Development of the Company — The Spin-Off — Mechanics of the Spin-Off” and Item 10.B. “Additional Information — Memorandum and Articles of Association — Description of OurUnits and Our Limited Partnership Agreement” for information regarding the spin-off, our units and our limitedpartnership agreement.Prior SalesOn January 3, 2012, our company issued 900 of our units to Brookfield Asset Management in connectionwith our formation. On January 5, 2012, the Property Partnership issued 1,000 limited partnership units to ourcompany in connection with its formation.Transfer Agent and RegistrarWe expect that CIBC Mellon Trust Company in Toronto, Ontario will be appointed to act as transferagent and registrar and American Stock Transfer & Trust Company, LLC in New York, New York will beappointed to act as co-transfer agent and co-registrar for the purpose of registering our limited partnershipinterests and transfers of our limited partnership interests as provided in our limited partnership agreement.10.B. MEMORANDUM AND ARTICLES OF ASSOCIATIONDESCRIPTION OF OUR UNITS AND OUR LIMITED PARTNERSHIP AGREEMENTThe following is a description of the material terms of our units and our amended and restated limitedpartnership agreement, which will be entered into in connection with the consummation of the spin-off, and isqualified in its entirety by reference to all of the provisions of our limited partnership agreement. Because thisdescription is only a summary of the terms of our units and our limited partnership agreement, it does not containall of the information that you may find useful. For more complete information, you should read our limitedpartnership agreement, the form of which will be filed as an exhibit to this Form 20-F. The limited partnershipagreement will be available electronically on the website of the SEC at www.sec.gov and on our SEDAR profileat www.sedar.com and made available to our holders as described under Item 10.C. “Additional Information —Material Contracts” and Item 10.H. “Documents on Display”.Formation and DurationOur company is a Bermuda exempted limited partnership registered under the Bermuda LimitedPartnership Act 1883 and the Bermuda Exempted Partnerships Act 1992. Our company has a perpetual existenceand will continue as a limited liability partnership unless terminated or dissolved in accordance with our limitedpartnership agreement. Our partnership interests consist of our units, which represent limited partnership interestsin our company, and any additional partnership interests representing limited partnership interests that we mayissue in the future as described below under “— Issuance of Additional Partnership Interests”.ManagementAs required by law, our limited partnership agreement provides for the management and control of ourcompany by a general partner, the BPY General Partner.136

Nature and PurposeUnder our limited partnership agreement, the purpose of our company is to: acquire and hold interests in theProperty Partnership and, subject to the approval of the BPY General Partner, interests in any other entity; engagein any activity related to the capitalization and financing of our company’s interests in such entities; and engage inany other activity that is incidental to or in furtherance of the foregoing and that is approved by the BPY GeneralPartner and that lawfully may be conducted by a limited partnership organized under the Bermuda LimitedPartnership Act 1883, the Bermuda Exempted Partnerships Act 1992 and our limited partnership agreement.Our UnitsOur units are non-voting limited partnership interests in our company. Holders of our units are notentitled to the withdrawal or return of capital contributions in respect of our units, except to the extent, if any,that distributions are made to such holders pursuant to our limited partnership agreement or upon the liquidationof our company as described below under “— Liquidation and Distribution of Proceeds” or as otherwise requiredby applicable law. Holders of our units are not entitled to vote on matters relating to our company except asdescribed below under “— No Management or Control; No Voting”. Except to the extent expressly provided inour limited partnership agreement, a holder of our units will not have priority over any other holder of our units,either as to the return of capital contributions or as to profits, losses or distributions. Our limited partnershipagreement does not contain any restrictions on ownership of our units. Holders of our units will not be grantedany pre-emptive or other similar right to acquire additional interests in our company, unless otherwisedetermined by the BPY General Partner, in its sole discretion. In addition, holders of our units do not have anyright to have their units redeemed by our company. Our units have no par or other stated value.Issuance of Additional Partnership InterestsThe BPY General Partner has broad rights to cause our company to issue additional partnership interestsand may cause us to issue additional partnership interests (including new classes of partnership interests andoptions, rights, warrants and appreciation rights relating to such interests) for any partnership purpose, at anytime and on such terms and conditions as it may determine without the approval of any limited partners. Anyadditional partnership interests may be issued in one or more classes, or one or more series of classes, with suchdesignations, preferences, rights, powers and duties (which may be senior to existing classes and series ofpartnership interests) as may be determined by the BPY General Partner in its sole discretion, all without theapproval of our limited partners.Investments in Property PartnershipIf and to the extent that our company raises funds by way of the issuance of equity or debt securities, orotherwise, pursuant to a public offering, private placement or otherwise, an amount equal to the proceeds will beinvested in the Property Partnership, unless otherwise agreed by us and the Property Partnership.Capital ContributionsNo partner has the right to withdraw any or all of its capital contribution. The limited partners have noliability for further capital contributions to our company. Each limited partner’s liability will be limited to theamount of capital such partner is obligated to contribute to our company for its limited partner interest plus itsshare of any undistributed profits and assets, subject to certain exceptions. See “— Limited Liability” below.DistributionsDistributions to partners of our company will be made only as determined by the BPY General Partner inits sole discretion. However, the BPY General Partner will not be permitted to cause our company to make a137

distribution if it does not have sufficient cash on hand to make the distribution (including as a result ofborrowing), the distribution would render it insolvent, or if, in the opinion of the BPY General Partner, thedistribution would leave it with insufficient funds to meet any future or contingent obligations, or the distributionwould contravene the Bermuda Limited Partnership Act 1883. For greater certainty, our company, the PropertyPartnership or one or more of the Holding Entities may (but none is obligated to) borrow money in order toobtain sufficient cash to make a distribution. The amount of taxes withheld or paid by us in respect of our unitsheld by limited partners or the BPY General Partner shall be treated either as a distribution to such partner or as ageneral expense of our company as determined by the BPY General Partner in its sole discretion.Any distributions from our company will be made to the limited partners as to 99.8% and to the BPYGeneral Partner as to 0.2%. Each limited partner will receive a pro rata share of distributions made to all limitedpartners in accordance with the proportion of all outstanding units held by that limited partner. Except forreceiving 0.2% of distributions from our company, the BPY General Partner shall not be compensated for itsservices as the BPY General Partner but it shall be reimbursed for certain expenses. See Item 10.F. “AdditionalInformation — Dividends and Paying Agents — Distribution Policy”.Allocations of Income and LossesLimited partners share in the net profits and net losses of our company generally in accordance with theirrespective percentage interest in our company.Net income and net losses for U.S. federal income tax purposes will be allocated for each taxable year orother relevant period among our partners using a monthly, quarterly or other permissible convention pro rata on aper unit basis, except to the extent otherwise required by law or pursuant to tax elections made by our company.Each item of income, gain, loss and deduction so allocated to a partner of our partnership generally will be thesame source and character as though such partner had realized the item directly.The income for Canadian federal income tax purposes of our company for a given fiscal year will beallocated to each partner in an amount calculated by multiplying such income by a fraction, the numerator ofwhich is the sum of the distributions received by such partner with respect to such fiscal year and thedenominator of which is the aggregate amount of the distributions made by our company to partners with respectto such fiscal year. To such end, any person who was a partner at any time during such fiscal year but who hastransferred all of their units before the last day of that fiscal year may be deemed to be a partner on the last day ofsuch fiscal year for the purposes of subsection 96(1) of the Tax Act. Generally, the source and character of itemsof income so allocated to a partner with respect to a fiscal year of our company will be the same source andcharacter as the distributions received by such partner with respect to such fiscal year.If, with respect to a given fiscal year, no distribution is made by our company or we have a loss forCanadian federal income tax purposes, one quarter of the income, or loss, as the case may be, for Canadianfederal income tax purposes of our company for such fiscal year, will be allocated to the partners of record at theend of each calendar quarter ending in such fiscal year pro rata to their respective percentage interests in ourcompany, which in the case of the BPY General Partner shall mean 0.2%, and in the case of all of our limitedpartners shall mean in the aggregate 99.8%, which aggregate percentage interest shall be allocated among thelimited partners in the proportion that the number of our units held at each such date by a limited partner is of thetotal number of our units issued and outstanding at each such date. Generally, the source and character of suchincome or losses so allocated to a partner at the end of each calendar quarter will be the same source andcharacter as the income or loss earned or incurred by our company in such calendar quarter.Limited LiabilityAssuming that a limited partner does not participate in the control or management of our company orconduct the affairs of, sign or execute documents for or otherwise bind our company within the meaning of the138

Bermuda Limited Partnership Act 1883 and otherwise acts in conformity with the provisions of our limitedpartnership agreement, such partner’s liability under the Bermuda Limited Partnership Act 1883 and our limitedpartnership agreement will be limited to the amount of capital such partner is obligated to contribute to ourcompany for its limited partner interest plus its share of any undistributed profits and assets, except as describedbelow.If it were determined, however, that a limited partner was participating in the control or management ofour company or conducting the affairs of, signing or executing documents for or otherwise binding our company(or purporting to do any of the foregoing) within the meaning of the Bermuda Limited Partnership Act 1883 orthe Bermuda Exempted Partnerships Act 1992, such limited partner would be liable as if it were a general partnerof our partnership in respect of all debts of our company incurred while that limited partner was so acting orpurporting to act. Neither our limited partnership agreement nor the Bermuda Limited Partnership Act 1883specifically provides for legal recourse against the BPY General Partner if a limited partner were to lose limitedliability through any fault of the BPY General Partner. While this does preclude a limited partner from seekinglegal recourse, we are not aware of any precedent for such a claim in Bermuda case law.No Management or Control; No VotingOur company’s limited partners, in their capacities as such, may not take part in the management orcontrol of the activities and affairs of our company and do not have any right or authority to act for or to bind ourcompany or to take part or interfere in the conduct or management of our company. Limited partners are notentitled to vote on matters relating to our company, although holders of units are entitled to consent to certainmatters with respect to certain amendments to our limited partnership agreement and certain matters with respectto the withdrawal of the BPY General Partner as described in further detail below. Each unit entitles the holderthereof to one vote for the purposes of any approvals of holders of units.MeetingsThe BPY General Partner may call special meetings of the limited partners at a time and place outside ofCanada determined by the BPY General Partner on a date not less than 10 days nor more than 60 days after themailing of notice of the meeting. The limited partners do not have the ability to call a special meeting. Onlyholders of record on the date set by the BPY General Partner (which may not be less than 10 nor more than 60days before the meeting) are entitled to notice of any meeting.Written consents may be solicited only by or on behalf of the BPY General Partner. Any such consentsolicitation may specify that any written consents must be returned to our company within the time period, whichmay not be less than 20 days, specified by the BPY General Partner.For purposes of determining holders of partnership interests entitled to provide consents to any actiondescribed above, the BPY General Partner may set a record date, which may be not less than 10 nor more than 60days before the date by which record holders are requested in writing by the BPY General Partner to providesuch consents. Only those holders of partnership interests on the record date established by the BPY GeneralPartner will be entitled to provide consents with respect to matters as to which a consent right applies.Amendment of Our Limited Partnership AgreementAmendments to our limited partnership agreement may be proposed only by or with the consent of theBPY General Partner. To adopt a proposed amendment, other than the amendments that do not require limitedpartner approval discussed below, the BPY General Partner must seek approval of a majority of our outstandingunits required to approve the amendment, either by way of a meeting of the limited partners to consider and voteupon the proposed amendment or by written approval.139

Prohibited AmendmentsNo amendment may be made that would:1. enlarge the obligations of any limited partner without its consent, except that any amendment thatwould have a material adverse effect on the rights or preferences of any class of partnershipinterests in relation to other classes of partnership interests may be approved by at least a majorityof the type or class of partnership interests so affected; or2. enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way theamounts distributable, reimbursable or otherwise payable by our company to the BPY GeneralPartner or any of its affiliates without the consent of the BPY General Partner, which may begiven or withheld in its sole discretion.The provision of our limited partnership agreement preventing the amendments having the effectsdescribed in clauses (1) and (2) above can be amended upon the approval of the holders of at least 90% of theoutstanding units.No Limited Partner ApprovalSubject to applicable law, the BPY General Partner may generally make amendments to our limitedpartnership agreement without the approval of any limited partner to reflect:1. a change in the name of our company, the location of our registered office or our registered agent;2. the admission, substitution or withdrawal of partners in accordance with our limited partnershipagreement;3. a change that the BPY General Partner determines is reasonable and necessary or appropriate forour company to qualify or to continue our company’s qualification as an exempted limitedpartnership under the laws of Bermuda or a partnership in which the limited partners have limitedliability under the laws of any jurisdiction or is necessary or advisable in the opinion of the BPYGeneral Partner to ensure that our company will not be treated as an association taxable as acorporation or otherwise taxed as an entity for tax purposes;4. an amendment that the BPY General Partner determines to be necessary or appropriate to addresscertain changes in tax regulations, legislation or interpretation;5. an amendment that is necessary, in the opinion of our counsel, to prevent our company or the BPYGeneral Partner or its directors or officers, from in any manner being subjected to the provisionsof the U.S. Investment Company Act of 1940 or similar legislation in other jurisdictions;6. an amendment that the BPY General Partner determines in its sole discretion to be necessary orappropriate for the creation, authorization or issuance of any class or series of partnership interestsor options, rights, warrants or appreciation rights relating to partnership securities;7. any amendment expressly permitted in our limited partnership agreement to be made by the BPYGeneral Partner acting alone;8. any amendment that the BPY General Partner determines in its sole discretion to be necessary orappropriate to reflect and account for the formation by our company of, or its investment in, anycorporation, partnership, joint venture, limited liability company or other entity, as otherwisepermitted by our limited partnership agreement;9. a change in our company’s fiscal year and related changes; or10. any other amendments substantially similar to any of the matters described in (1) through(9) above.140

In addition, the BPY General Partner may make amendments to our limited partnership agreementwithout the approval of any limited partner if those amendments, in the discretion of the BPY General Partner:1. do not adversely affect our company’s limited partners considered as a whole (including anyparticular class of partnership interests as compared to other classes of partnership interests) inany material respect;2. are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in anyopinion, directive, order, ruling or regulation of any governmental agency or judicial authority;3. are necessary or appropriate to facilitate the trading of our units or to comply with any rule,regulation, guideline or requirement of any securities exchange on which our units are or will belisted for trading;4. are necessary or appropriate for any action taken by the BPY General Partner relating to splits orcombinations of units under the provisions of our limited partnership agreement; or5. are required to effect the intent expressed in this Form 20-F or the intent of the provisions of ourlimited partnership agreement or are otherwise contemplated by our limited partnershipagreement.Opinion of Counsel and Limited Partner ApprovalThe BPY General Partner will not be required to obtain an opinion of counsel that an amendment will notresult in a loss of limited liability to the limited partners if one of the amendments described above under “— NoLimited Partner Approval” should occur. No other amendments to our limited partnership agreement willbecome effective without the approval of holders of at least 90% of our units, unless our company obtains anopinion of counsel to the effect that the amendment will not (i) cause our company to be treated as an associationtaxable as a corporation or otherwise taxable as an entity for tax purposes (provided that for U.S. tax purposes theBPY General Partner has not made the election described below under “— Election to be Treated as aCorporation”), or (ii) affect the limited liability under the Bermuda Limited Partnership Act 1883 of any of ourcompany’s limited partners.In addition to the above restrictions, any amendment that would have a material adverse effect on therights or preferences of any type or class of partnership interests in relation to other classes of partnershipinterests will also require the approval of the holders of at least a majority of the outstanding partnership interestsof the class so affected.In addition, any amendment that reduces the voting percentage required to take any action must beapproved by the written consent or affirmative vote of limited partners whose aggregate outstanding voting unitsconstitute not less than the voting requirement sought to be reduced.Sale or Other Disposition of AssetsOur limited partnership agreement generally prohibits the BPY General Partner, without the priorapproval of the holders of at least 66 2 ⁄3% of the voting power of our units, from causing our company to, amongother things, sell, exchange or otherwise dispose of all or substantially all of our assets in a single transaction or aseries of related transactions. However, the BPY General Partner, in its sole discretion, may mortgage, pledge,hypothecate or grant a security interest in all or substantially all of our assets (including for the benefit of personswho are not our company or our company’s subsidiaries) without that approval. The BPY General Partner mayalso sell all or substantially all of our assets under any forced sale of any or all of our assets pursuant to theforeclosure or other realization upon those encumbrances without that approval.141

Take-Over BidsIf, within 120 days after the date of a take-over bid, as defined in the Securities Act (Ontario), the takeoverbid is accepted by holders of not less than 90% of our outstanding units, other than our units held at the dateof the take-over bid by the offeror or any affiliate or associate of the offeror, and the offeror acquires the unitsdeposited or tendered under the take-over bid, the offeror will be entitled to acquire our units not deposited underthe take-over bid on the same terms as the units acquired under the take-over bid.Election to be Treated as a CorporationIf the BPY General Partner determines in its sole discretion that it is no longer in our company’s bestinterests to continue as a partnership for U.S. federal income tax purposes, the BPY General Partner may elect totreat our company as an association or as a publicly-traded partnership taxable as a corporation for U.S. federal(and applicable state) income tax purposes.Termination and DissolutionOur company will terminate upon the earlier to occur of: (i) the date on which all of our company’s assetshave been disposed of or otherwise realized by us and the proceeds of such disposals or realizations have beendistributed to partners; (ii) the service of notice by the BPY General Partner, with the special approval of amajority of its independent directors, that in its opinion the coming into force of any law, regulation or bindingauthority renders illegal or impracticable the continuation of our company; and (iii) at the election of the BPYGeneral Partner, if our company, as determined by the BPY General Partner, is required to register as an“investment company” under the U.S. Investment Company Act of 1940 or similar legislation in otherjurisdictions.Our partnership will be dissolved upon the withdrawal of the BPY General Partner as the general partnerof our partnership (unless a successor entity becomes the general partner as described in the following sentenceor the withdrawal is effected in compliance with the provisions of our limited partnership agreement that aredescribed below under “— Withdrawal of the BPY General Partner”) or the date on which any court ofcompetent jurisdiction enters a decree of judicial dissolution of our partnership or an order to wind-up orliquidate the BPY General Partner without the appointment of a successor in compliance with the provisions ofour limited partnership agreement that are described below under “— Withdrawal of the BPY General Partner”.Our partnership will be reconstituted and continue without dissolution if within 30 days of the date of dissolution(and provided a notice of dissolution has not been filed with the Bermuda Monetary Authority), a successorgeneral partner executes a transfer deed pursuant to which the new general partner assumes the rights andundertakes the obligations of the general partner, but only if our partnership receives an opinion of counsel thatthe admission of the new general partner will not result in the loss of limited liability of any limited partner.Liquidation and Distribution of ProceedsUpon our dissolution, unless our company is continued as a new limited partnership, the liquidatorauthorized to wind-up our company’s affairs will, acting with all of the powers of the BPY General Partner thatthe liquidator deems necessary or appropriate in its judgment, liquidate our company’s assets and apply theproceeds of the liquidation first, to discharge our company’s liabilities as provided in our limited partnershipagreement and by law and thereafter to the partners pro rata according to the percentages of their respectivepartnership interests as of a record date selected by the liquidator. The liquidator may defer liquidation of ourassets for a reasonable period of time or distribute assets to partners in kind if it determines that an immediatesale or distribution of all or some of our company’s assets would be impractical or would cause undue loss to thepartners.142

Withdrawal of the BPY General PartnerThe BPY General Partner may withdraw as the general partner without first obtaining approval of ourunitholders by giving written notice to the other partners, and that withdrawal will not constitute a violation ofour limited partnership agreement.Upon the withdrawal of a general partner, the holders of at least a majority of our units may select asuccessor to that withdrawing general partner. If a successor is not selected, or is selected but an opinion ofcounsel regarding limited liability, tax matters and the U.S. Investment Company Act of 1940 (and similarlegislation in other jurisdictions) cannot be obtained, our company will be dissolved, wound up and liquidated.See “— Termination and Dissolution” above.In the event of the withdrawal of a general partner, where such withdrawal will violate our limitedpartnership agreement, a successor general partner will have the option to purchase the general partnershipinterest of the departing general partner for a cash payment equal to its fair market value. Under all othercircumstances where a general partner withdraws, the departing general partner will have the option to requirethe successor general partner to purchase the general partnership interest of the departing general partner for acash payment equal to its fair market value. In each case, this fair market value will be determined by agreementbetween the departing general partner and the successor general partner. If no agreement is reached within 30days of the general partner’s departure, an independent investment banking firm or other independent expertselected by the departing general partner and the successor general partner will determine the fair market value.If the departing general partner and the successor general partner cannot agree upon an expert within 45 days ofthe general partner’s departure, then an expert chosen by agreement of the experts selected by each of them willdetermine the fair market value.If the option described above is not exercised by either the departing general partner or the successorgeneral partner, the departing general partner’s general partnership interest will automatically convert into unitspursuant to a valuation of those interests as determined by an investment banking firm or other independentexpert selected in the manner described in the preceding paragraph.Transfer of the General Partnership InterestThe BPY General Partner may transfer all or any part of its general partnership interests without firstobtaining approval of any unitholder. As a condition of this transfer, the transferee must: (i) be an affiliate of thegeneral partner of the Property Partnership (or the transfer must be made concurrently with a transfer of thegeneral partnership units of the Property Partnership to an affiliate of the transferee); (ii) agree to assume therights and duties of the BPY General Partner to whose interest that transferee has succeeded; (iii) agree to assumeand be bound by the provisions of our limited partnership agreement; and (iv) furnish an opinion of counselregarding limited liability, tax matters and the U.S. Investment Company Act of 1940 (and similar legislation inother jurisdictions). Any transfer of the general partnership interest is subject to prior notice to and approval ofthe relevant Bermuda regulatory authorities. At any time, the members of the BPY General Partner may sell ortransfer all or part of their shares in the BPY General Partner without the approval of the unitholders.Partnership NameIf the BPY General Partner ceases to be the general partner of our partnership and our new generalpartner is not an affiliate of Brookfield, our company will be required by our limited partnership agreement tochange our name to a name that does not include “Brookfield” and which could not be capable of confusion inany way with such name. Our limited partnership agreement explicitly provides that this obligation shall beenforceable and waivable by the BPY General Partner notwithstanding that it may have ceased to be the generalpartner of our partnership.143

Transactions with Interested PartiesThe BPY General Partner, its affiliates and their respective partners, members, directors, officers,employees and shareholders, which we refer to as “interested parties,” may become limited partners orbeneficially interested in limited partners and may hold, dispose of or otherwise deal with our units with the samerights they would have if the BPY General Partner was not a party to our limited partnership agreement. Aninterested party will not be liable to account either to other interested parties or to our company, our company’spartners or any other persons for any profits or benefits made or derived by or in connection with any suchtransaction.Our limited partnership agreement permits an interested party to sell investments to, purchase assets from,vest assets in and enter into any contract, arrangement or transaction with our company, the Property Partnership,any of the Holding Entities, any operating entity or any other holding entity established by our company and maybe interested in any such contract, transaction or arrangement and shall not be liable to account either to ourcompany, the Property Partnership, any of the Holding Entities, any operating entity or any other holding entityestablished by our company or any other person in respect of any such contract, transaction or arrangement, orany benefits or profits made or derived therefrom, by virtue only of the relationship between the partiesconcerned, subject to the bye-laws of the BPY General Partner.Outside Activities of the BPY General Partner; Conflicts of InterestUnder our limited partnership agreement, the BPY General Partner is required to maintain as its soleactivity the activity of acting as the general partner of our partnership. The BPY General Partner is not permittedto engage in any business or activity or incur or guarantee any debts or liabilities except in connection with orincidental to its performance as general partner or incurring, guaranteeing, acquiring, owning or disposing of debtor equity securities of the Property Partnership, a Holding Entity or any other holding entity established by ourcompany.Our limited partnership agreement provides that each person who is entitled to be indemnified by ourcompany (other than the BPY General Partner), as described below under “— Indemnification; Limitation onLiability”, will have the right to engage in businesses of every type and description and other activities for profit,and to engage in and possess interests in business ventures of any and every type or description, irrespective ofwhether: (i) such businesses and activities are similar to our activities; or (ii) such businesses and activitiesdirectly compete with, or disfavor or exclude, the BPY General Partner, our company, the Property Partnership,any Holding Entity, any operating entity or any other holding entity established by us. Such business interests,activities and engagements will be deemed not to constitute a breach of our limited partnership agreement or anyduties stated or implied by law or equity, including fiduciary duties, owed to any of the BPY General Partner, ourcompany, the Property Partnership, any Holding Entity, any operating entity and any other holding entityestablished by us (or any of their respective investors), and shall be deemed not to be a breach of the BPYGeneral Partner’s fiduciary duties or any other obligation of any type whatsoever of the BPY General Partner.None of the BPY General Partner, our company, the Property Partnership, any Holding Entity, any operatingentity, any other holding entity established by us or any other person shall have any rights by virtue of ourlimited partnership agreement or the partnership relationship established thereby or otherwise in any businessventures of any person who is entitled to be indemnified by our company as described below under “—Indemnification; Limitation on Liability”.The BPY General Partner and the other indemnified persons described in the preceding paragraph do nothave any obligation under our limited partnership agreement or as a result of any duties stated or implied by lawor equity, including fiduciary duties, to present business or investment opportunities to our company, our limitedpartners, the Property Partnership, any Holding Entity, any operating entity or any other holding entityestablished by our company. These provisions do not affect any obligation of an indemnified person to presentbusiness or investment opportunities to our company, the Property Partnership, any Holding Entity, any operating144

entity or any other holding entity established by our company pursuant to the Relationship Agreement or aseparate written agreement between such persons.Any conflicts of interest and potential conflicts of interest that are approved by the BPY General Partner’snominating and governance committee from time to time will be deemed approved by all partners. Pursuant toour conflicts policy, by a majority vote, independent directors may grant approvals for any of the transactionsdescribed above in the form of general guidelines, policies or procedures in which case no further specialapproval will be required in connection with a particular transaction or matter permitted thereby. See Item 7.B.“Major Shareholders and Related Party Transactions — Related Party Transactions — Relationship withBrookfield — Conflicts of Interest and Fiduciary Duties”.Indemnification; Limitations on LiabilityUnder our limited partnership agreement, our company is required to indemnify to the fullest extentpermitted by law the BPY General Partner and any of its affiliates (and their respective officers, directors, agents,shareholders, partners, members and employees), any person who serves on a governing body of the PropertyPartnership, a Holding Entity, operating entity or any other holding entity established by our company and anyother person designated by the BPY General Partner as an indemnified person, in each case, against all losses,claims, damages, liabilities, costs or expenses (including legal fees and expenses), judgments, fines, penalties,interest, settlements and other amounts arising from any and all claims, demands, actions, suits or proceedings,incurred by an indemnified person in connection with our investments and activities or by reason of their holdingsuch positions, except to the extent that the claims, liabilities, losses, damages, costs or expenses are determinedto have resulted from the indemnified person’s bad faith, fraud or willful misconduct, or in the case of a criminalmatter, action that the indemnified person knew to have been unlawful. In addition, under our limited partnershipagreement: (i) the liability of such persons has been limited to the fullest extent permitted by law, except to theextent that their conduct involves bad faith, fraud or willful misconduct, or in the case of a criminal matter, actionthat the indemnified person knew to have been unlawful; and (ii) any matter that is approved by the independentdirectors of the BPY General Partner will not constitute a breach of our limited partnership agreement or anyduties stated or implied by law or equity, including fiduciary duties. Our limited partnership agreement requiresus to advance funds to pay the expenses of an indemnified person in connection with a matter in whichindemnification may be sought until it is determined that the indemnified person is not entitled toindemnification.Accounts, Reports and Other InformationUnder our limited partnership agreement, within the time required by applicable law, including any rulesof any applicable securities exchange, the BPY General Partner is required to prepare financial statements inaccordance with IFRS or such other appropriate accounting principles as determined from time to time and makepublicly available as of a date selected by the BPY General Partner, in its sole discretion, our company’sfinancial statements together with a statement of the accounting policies used in their preparation, suchinformation as may be required by applicable laws and regulations and such information as the BPY GeneralPartner deems appropriate. Our company’s annual financial statements must be audited by an independentaccounting firm of international standing. Our company’s quarterly financial statements may be unaudited andwill be made available publicly as and within the time period required by applicable laws and regulations,including any rules of any applicable securities exchange.The BPY General Partner is also required to use commercially reasonable efforts to prepare and send tothe limited partners of our partnership on an annual basis a Schedule K-1 (or equivalent). The BPY GeneralPartner will, where reasonably possible, prepare and send information required by the non-U.S. limited partnersof our partnership for U.S. federal income tax reporting purposes. The BPY General Partner will also usecommercially reasonable efforts to supply information required by limited partners of our partnership forCanadian federal income tax purposes.145

Governing Law; Submission to JurisdictionOur limited partnership agreement is governed by and will be construed in accordance with the laws ofBermuda. Under our limited partnership agreement, each of our company’s partners (other than governmentalentities prohibited from submitting to the jurisdiction of a particular jurisdiction) will submit to the non-exclusivejurisdiction of any court in Bermuda in any dispute, suit, action or proceeding arising out of or relating to ourlimited partnership agreement. Each partner waives, to the fullest extent permitted by law, any immunity fromjurisdiction of any such court or from any legal process therein and further waives, to the fullest extent permittedby law, any claim of inconvenient forum, improper venue or that any such court does not have jurisdiction overthe partner. Any final judgment against a partner in any proceedings brought in a court in Bermuda will beconclusive and binding upon the partner and may be enforced in the courts of any other jurisdiction of which thepartner is or may be subject, by suit upon such judgment. The foregoing submission to jurisdiction and waiverswill survive the dissolution, liquidation, winding up and termination of our company.Transfers of UnitsWe are not required to recognize any transfer of our units until certificates, if any, evidencing such unitsare surrendered for registration of transfer. Each person to whom a unit is transferred (including any nomineeholder or an agent or representative acquiring such unit for the account of another person) will be admitted to ourpartnership as a partner with respect to the unit so transferred subject to and in accordance with the terms of ourlimited partnership agreement. Any transfer of a unit will not entitle the transferee to share in the profits andlosses of our company, to receive distributions, to receive allocations of income, gain, loss, deduction or credit orany similar item or to any other rights to which the transferor was entitled until the transferee becomes a partnerand a party to our limited partnership agreement.By accepting a unit for transfer in accordance with our limited partnership agreement, each transferee willbe deemed to have:• executed our limited partnership agreement and become bound by the terms thereof;• granted an irrevocable power of attorney to the BPY General Partner or the liquidator of ourcompany and any officer thereof to act as such partner’s agent and attorney-in-fact to execute,swear to, acknowledge, deliver, file and record in the appropriate public offices: (i) all certificates,documents and other instruments relating to the existence or qualification of our company as anexempted limited partnership (or a partnership in which the limited partners have limited liability)in Bermuda and in all jurisdictions in which our company may conduct activities and affairs or ownproperty; any amendment, change, modification or restatement of our limited partnershipagreement, subject to the requirements of our limited partnership agreement; the dissolution andliquidation of our company; the admission or withdrawal of any partner of our partnership or anycapital contribution of any partner of our partnership; the determination of the rights, preferencesand privileges of any class or series of units or other partnership interests of our company, and anytax election with any limited partner or general partner on behalf of our partnership or the partners;and (ii) subject to the requirements of our limited partnership agreement, all ballots, consents,approvals, waivers, certificates, documents and other instruments necessary or appropriate, in thesole discretion of the BPY General Partner or the liquidator of our company, to make, evidence,give, confirm or ratify any voting consent, approval, agreement or other action that is made orgiven by our company’s partners or is consistent with the terms of our limited partnershipagreement or to effectuate the terms or intent of our limited partnership agreement;• made the consents and waivers contained in our limited partnership agreement, including withrespect to the approval of the transactions and agreements entered into in connection with ourformation and the spin-off; and146

• ratified and confirmed all contracts, agreements, assignments and instruments entered into onbehalf of our company in accordance with our limited partnership agreement, including thegranting of any charge or security interest over the assets of our company and the assumption ofany indebtedness in connection with the affairs of our company.The transfer of any unit and the admission of any new partner to our partnership will not constitute anyamendment to our limited partnership agreement.Book-Based SystemOur units may be represented in the form of one or more fully registered unit certificates held by, or onbehalf of, the Canadian Depository for Securities, or CDS, or the Depository Trust Company, or DTC, asapplicable, as custodian of such certificates for the participants of CDS or DTC, registered in the name of CDS orDTC or their respective nominee, and registration of ownership and transfers of our units may be effectedthrough the book-based system administered by CDS or DTC as applicable.147

DESCRIPTION OF THE PROPERTY PARTNERSHIP LIMITED PARTNERSHIP AGREEMENTThe following is a description of the material terms of the Property Partnership’s limited partnershipagreement, which will be entered into in connection with the consummation of the spin-off, and is qualified in itsentirety by reference to all of the provisions of such agreement. You will not be a limited partner of the PropertyPartnership and will not have any rights under its limited partnership agreement. However, pursuant to theVoting Agreement, our company, through the BPY General Partner, will have a number of voting rights ,including the right to direct all eligible votes in the election of the directors of the Property General Partner.We have included a summary of what we believe are the most important provisions of the PropertyPartnership’s limited partnership agreement because we intend to conduct our operations through the PropertyPartnership and the Holding Entities and our rights with respect to our equity holding in the Property Partnershipwill be governed by the terms of the Property Partnership’s limited partnership agreement. Because thisdescription is only a summary of the terms of the agreement, it does not contain all of the information that youmay find useful. For more complete information, you should read the Property Partnership’s limited partnershipagreement, the form of which will be filed as an exhibit to this Form 20-F. The agreement will be availableelectronically on the website of the SEC at www.sec.gov and on our SEDAR profile at www.sedar.com and willbe made available to our unitholders as described under Item 10.C. “Additional Information — MaterialContracts” and Item 10.H. “Documents on Display”.Formation and DurationThe Property Partnership is a Bermuda exempted limited partnership registered under the BermudaLimited Partnership Act 1883 and the Bermuda Exempted Partnerships Act 1992. The Property Partnership has aperpetual existence and will continue as a limited liability partnership unless the partnership is terminated ordissolved in accordance with its limited partnership agreement.ManagementAs required by law, the Property Partnership’s limited partnership agreement provides for themanagement and control of the Property Partnership by a general partner, the Property GP LP.Nature and PurposeUnder its limited partnership agreement, the purpose of the Property Partnership is to: acquire and holdinterests in the Holding Entities and, subject to the approval of the Property GP LP, any other entity; engage inany activity related to the capitalization and financing of the Property Partnership’s interests in such entities; andengage in any other activity that is incidental to or in furtherance of the foregoing and that is approved by theProperty GP LP and that lawfully may be conducted by a limited partnership organized under the BermudaLimited Partnership Act 1883, the Bermuda Exempted Partnerships Act 1992 and our limited partnershipagreement.UnitsThe Property Partnership has two classes of units: class A non-voting limited partnership interests in theProperty Partnership, or the Class A Units, and the Redemption-Exchange Units. Holders of either class of PropertyPartnership units are not entitled to the withdrawal or return of capital contributions in respect of their units, exceptto the extent, if any, that distributions are made to such holders pursuant to the Property Partnership’s limitedpartnership agreement or upon the dissolution of the Property Partnership as described below under“— Dissolution” or as otherwise required by applicable law. Holders of the Property Partnership’s units are notentitled to vote on matters relating to the Property Partnership except as described below under “— No Managementor Control; No Voting”. Except to the extent expressly provided in the Property Partnership’s limited partnership148

agreement, a holder of Property Partnership units will not have priority over any other holder of PropertyPartnership units, either as to the return of capital contributions or as to profits, losses or distributions. The PropertyPartnership’s limited partnership agreement does not contain any restrictions on ownership of the PropertyPartnership units. The units of the Property Partnership have no par or other stated value.The Redemption-Exchange Units will be identical to the Class A Units, except as described below under“— Distributions” and “— No Management or Control; No Voting” and except that they will have the right ofredemption or exchange as described below under “— Redemption-Exchange Mechanism”.In connection with the spin-off, the Class A Units of the Property Partnership will be issued to ourcompany and the Redemption-Exchange Units will be issued to one or more wholly-owned subsidiaries ofBrookfield Asset Management.Issuance of Additional Partnership InterestsThe Property Partnership may issue additional partnership interests (including Class A Units andRedemption-Exchange Units as well as new classes of partnership interests and options, rights, warrants andappreciation rights relating to such interests) for any partnership purpose, at any time and on such terms andconditions as the Property GP LP may determine without the approval of any limited partners. Any additionalpartnership interests may be issued in one or more classes, or one or more series of classes, with suchdesignations, preferences, rights, powers and duties (which may be senior to existing classes and series ofpartnership interests) as may be determined by Property GP LP in its sole discretion, all without the approval ofour limited partners.Redemption-Exchange MechanismAt any time after two years from the date of closing of the spin-off, the holders of the Redemption-Exchange Units will have the right to require the Property Partnership to redeem all or a portion of theRedemption-Exchange Units for cash, subject to our company’s right to acquire such interests for our units asdescribed below. Any such holder may exercise its right of redemption by delivering a notice of redemption tothe Property Partnership and our company.After presentation for redemption, it will receive, subject to our company’s right to acquire such interests(in lieu of redemption) in exchange for units of our company, for each unit that is presented, either (a) cash in anamount equal to the market value of one of our units multiplied by the number of units to be redeemed (asdetermined by reference to the five day volume weighted average of the trading price of our units on theprincipal stock exchange for our units based on trading volumes) or (b) such other amount of cash as may beagreed by such holder and the Property Partnership. Upon its receipt of the redemption notice, our company willhave a right to elect, at its sole discretion, to acquire all (but not less than all) Redemption-Exchange Unitspresented to the Property Partnership for redemption in exchange for units of our company on a one for onebasis. Upon a redemption, the holder’s right to receive distributions with respect to the Property PartnershipRedemption-Exchange Units so redeemed will cease.The date of exchange specified in any redemption notice may not be less than five business days nor morethan twenty business days after the date upon which the redemption notice is received by the PropertyPartnership and our company. At any time prior to the applicable redemption-exchange date, any holder ofRedemption-Exchange Units who delivers a redemption notice will be entitled to withdraw such redemptionnotice.Based on the number of our units to be distributed in the spin-off to holders of Brookfield AssetManagement’s Class A limited voting shares and Class B limited voting shares, the number of our units to beheld by Brookfield Asset Management after the spin-off and the number of Redemption-Exchange Units149

Brookfield will receive, Brookfield’s aggregate limited partnership interest in our company is currentlyanticipated to be approximately 90% if it exercised its redemption right in full and our company exercised itsright to acquire such interests in exchange for units of our company on the Property Partnership Redemption-Exchange Units redeemed. Brookfield’s total percentage interest in our company would be increased if itparticipates in the Property Partnership’s distribution reinvestment plan.DistributionsDistributions by the Property Partnership will be made in the sole discretion of the Property GP LP.However, the Property GP LP will not be permitted to cause the Property Partnership to make a distribution if theProperty Partnership does not have sufficient cash on hand to make the distribution, the distribution would renderthe Property Partnership insolvent or if, in the opinion of the Property GP LP, the distribution would or mightleave the Property Partnership with insufficient funds to meet any future or contingent obligations, or thedistribution would contravene the Bermuda Limited Partnership Act 1883. For greater certainty, the PropertyPartnership or one or more of the Holding Entities may (but none is obligated to) borrow money in order toobtain sufficient cash to make a distribution.Except as set forth below, prior to the dissolution of the Property Partnership, distributions of availablecash (if any), including cash that has been borrowed for such purpose, in any given quarter will be made by theProperty Partnership as follows, referred to as the Regular Distribution Waterfall:• first, 100% of any available cash to our company until our company has been distributed an amountequal to our expenses and outlays for the quarter properly incurred;• second, to the extent distributions in respect of Redemption-Exchange Units have accrued in previousquarters (as described in the next paragraph), 100% to all the holders of Redemption-Exchange Unitspro rata in proportion to their respective percentage interests (which will be calculated usingRedemption-Exchange Units only) (which distribution will be treated as having been made pursuantto the fourth and fifth provision below, as applicable) of all amounts that have been accrued inprevious quarters and not yet recovered to the holders of Redemption-Exchange Units;• third, 100% of any available cash then remaining to the Property GP LP until an amount equal to0.3125% of the amount by which our company’s total capitalization value exceeds the totalcapitalization value of our company determined immediately following the spin-off has beendistributed to the Property GP LP, provided that for any quarter in which the Property GP LPdetermines that there is insufficient cash to pay this equity enhancement distribution, the Property GPLP may elect to pay all or a portion of this distribution in Redemption-Exchange Units. Thisdistribution for any quarter will be reduced by an amount equal to (i) fees in excess of the basemanagement fee of $12.5 million (plus the amount of any annual escalation by the specified inflationfactor) are payable under our Master Services Agreement in such quarter plus (ii) the proportion ofeach cash payment in relation to such quarter made by an Operating Entity to Brookfield, includingany payment made in the form of a dividend, distribution or other profit entitlement, which theProperty GP LP determines to be comparable to this equity enhancement distribution that isattributable to the amount that a Service Recipient has committed and/or contributed at such time(either as debt or equity) to such Operating Entity (and, in the case of a commitment, as set forth inthe terms of the subscription agreement or other underlying documentation with respect to suchOperating Entity at or prior to such time), provided that the aggregate amount of any such paymentsunder this clause (ii) will not exceed an amount equal to 0.3125% of the amount the Service Recipienthas so committed and/or contributed. The total capitalization value of our company will be equal tothe aggregate of the value of all of our outstanding units and the securities of other Service Recipientsthat are not held by our company, the Property Partnership, the Holding Entities, the operating entitiesor any other direct or indirect subsidiary of a Holding Entity, plus all outstanding third party debt150

(including, generally, debt owed to Brookfield but not amounts owed under the Brookfield revolvingcredit facility that will be in place at closing of the spin-off) with recourse against our company, theProperty Partnership or a Holding Entity, less all cash held by such entities;• fourth, 100% of any available cash then remaining to the owners of the Property Partnership’spartnership interests, pro rata to their percentage interests, until an amount equal to the FirstDistribution Threshold, estimated to be $0.275 per unit, has been distributed in respect of each limitedpartnership unit during such quarter;• fifth, 85% of any available cash then remaining to the owners of the Property Partnership’spartnership interests, pro rata to their percentage interests, and 15% to the Property GP LP, until anamount equal to the Second Distribution Threshold, estimated to be $0.30 per unit, has beendistributed in respect of each Property Partnership limited partnership unit during such quarter; and• thereafter, 75% of any available cash then remaining to the owners of the Property Partnership’spartnership interests, pro rata to their percentage interests, and 25% to the Property GP LP.If, prior to the dissolution of the Property Partnership, available cash in any quarter is not sufficient to pay adistribution to the owners of all Property Partnership interests, pro rata to their percentage interest, then theProperty General Partner may elect to pay the distribution at the then current level first to our company, inrespect of the Class A Units of the Property Partnership held by our company, and then to the holders of theRedemption-Exchange Units to the extent practicable, and shall accrue any such deficiency for payment fromavailable cash in future quarters as described above.If, prior to the dissolution of the Property Partnership, available cash is deemed by the Property GP LP, inits sole discretion, to be (i) attributable to sales or other dispositions of the Property Partnership’s assets, and(ii) representative of unrecovered capital, then such available cash shall be distributed to the partners of theProperty Partnership in proportion to the unrecovered capital attributable to the Property Partnership interestsheld by the partners until such time as the unrecovered capital attributable to each such partnership interest isequal to zero. Thereafter, distributions of available cash made by the Property Partnership (to the extent madeprior to dissolution) will be made in accordance with the Regular Distribution Waterfall.Upon the occurrence of an event resulting in the dissolution of the Property Partnership, all cash andproperty of the Property Partnership in excess of that required to discharge the Property Partnership’s liabilitieswill be distributed as follows: (i) to the extent such cash and/or property is attributable to a realization eventoccurring prior to the event of dissolution, such cash and/or property will be distributed in accordance with theRegular Distribution Waterfall and/or the distribution waterfall applicable to unrecovered capital, (ii) theaggregate amount of distributions previously deferred in respect of the Redemption-Exchange Units and notpreviously recovered and (iii) all other cash and/or property will be distributed in the manner set forth below:• first, 100% to our company until our company has received an amount equal to the excess of: (i) theamount of our outlays and expenses incurred during the term of the Property Partnership; over (ii) theaggregate amount of distributions received by our company pursuant to the first tier of the RegularDistribution Waterfall during the term of the Property Partnership;• second, 100% to the Property GP LP until the Property GP LP has received an amount equal to thefair market value of the equity enhancement distribution entitlement, as determined by a qualifiedindependent valuator in accordance with the Property Partnership’s limited partnership agreement,provided that such amount may not exceed 2.5 times the aggregate equity enhancement distributionpayments made to the Property GP LP during the immediately prior 24 months;• third, 100% to the partners of the Property Partnership, in proportion to their respective amounts ofunrecovered capital in the Property Partnership;151

• fourth, 100% to the owners of the Property Partnership’s partnership interests, pro rata to theirpercentage interests, until an amount has been distributed in respect of each Property Partnershiplimited partnership unit equal to the excess of: (i) the First Distribution Threshold for each quarterduring the term of the Property Partnership (subject to adjustment upon the subsequent issuance ofadditional partnership interests in the Property Partnership); over (ii) the aggregate amount ofdistributions made in respect of a Property Partnership limited partnership unit pursuant to the thirdtier of the Regular Distribution Waterfall during the term of the Property Partnership (subject toadjustment upon the subsequent issuance of additional partnership interests in the PropertyPartnership);• fifth, 85% to the owners of the Property Partnership’s partnership interests, pro rata to theirpercentage interests, and 15% to the Property GP LP, until an amount has been distributed in respectof each Property Partnership limited partnership unit equal to the excess of: (i) the SecondDistribution Threshold less the First Distribution Threshold for each quarter during the term of theProperty Partnership (subject to adjustment upon the subsequent issuance of additional partnershipinterests in the Property Partnership); over (ii) the aggregate amount of distributions made in respectof an Property Partnership limited partnership unit pursuant to the fourth tier of the RegularDistribution Waterfall during the term of the Property Partnership (subject to adjustment upon thesubsequent issuance of additional partnership interests in the Property Partnership); and• thereafter, 75% to the owners of the Property Partnership’s partnership interests, pro rata to theirpercentage interests, and 25% to the Property GP LP.Each partner’s percentage interest is determined by the relative portion of all outstanding partnershipinterests held by that partner from time to time and is adjusted upon and reflects the issuance of additionalpartnership interests of the Property Partnership. In addition, the unreturned capital attributable to each of thepartnership interests, as well as certain of the distribution thresholds set forth above, may be adjusted pursuant tothe terms of the limited partnership agreement of the Property Partnership so as to ensure the uniformity of theeconomic rights and entitlements of: (i) the previously outstanding Property Partnership’s partnership interests;and (ii) the subsequently-issued Property Partnership’s partnership interests.The limited partnership agreement of the Property Partnership provides that, to the extent that anyHolding Entity or any operating entity pays to Brookfield any comparable performance or incentive distribution,the amount of any incentive distributions paid to the Property GP LP in accordance with the distributionentitlements described above will be reduced in an equitable manner to avoid duplication of distributions.The Property GP LP may elect, at its sole discretion, to reinvest equity enhancement distributions andincentive distributions in Redemption-Exchange Units.No Management or Control; No VotingThe Property Partnership’s limited partners, in their capacities as such, may not take part in themanagement or control of the activities and affairs of the Property Partnership and do not have any right orauthority to act for or to bind the Property Partnership or to take part or interfere in the conduct or managementof the Property Partnership. Limited partners are not entitled to vote on matters relating to the PropertyPartnership, although holders of units are entitled to consent to certain matters as described below under“— Amendment of the Property Partnership Limited Partnership Agreement”, “— Opinion of Counsel andLimited Partner Approval”, and “— Withdrawal of the General Partner” which may be effected only with theconsent of the holders of the percentages of outstanding units of the Property Partnership specified below. Forpurposes of any approval required from holders of the Property Partnership’s units, if Brookfield and itssubsidiaries are entitled to vote, they will be entitled to one vote per unit held subject to a maximum number ofvotes equal to 49% of the total number of units of the Property Partnership then issued and outstanding. Each unitentitles the holder thereof to one vote for the purposes of any approvals of holders of units.152

In addition, pursuant to the Voting Agreement, our company, through the BPY General Partner, has anumber of voting rights, including the right to direct all eligible votes in the election of the directors of theProperty General Partner. See Item 7.B. “Major Shareholders and Related Party Transactions — Related PartyTransactions — Voting Agreements”.MeetingsThe Property GP LP may call special meetings of the limited partners at a time and place outside ofCanada determined by it on a date not less than 10 days nor more than 60 days after the mailing of notice of themeeting. Special meetings of the limited partners may also be called by limited partners owning 50% or more ofthe outstanding partnership interests of the class or classes for which a meeting is proposed. For this purpose, thepartnership interests outstanding do not include partnership interests owned by the Property GP LP or Brookfield.Only holders of record on the date set by the Property GP LP (which may not be less than 10 days nor more than60 days, before the meeting) are entitled to notice of any meeting.Amendment of the Property Partnership Limited Partnership AgreementAmendments to the Property Partnership’s limited partnership agreement may be proposed only by orwith the consent of the Property GP LP. To adopt a proposed amendment, other than the amendments that do notrequire limited partner approval discussed below, the Property GP LP must seek approval of a majority of theProperty Partnership’s outstanding units required to approve the amendment, either by way of a meeting of thelimited partners to consider and vote upon the proposed amendment or by written approval. For this purpose, theRedemption-Exchange Units will not constitute a separate class and will vote together with the other outstandinglimited partnership units of the Property Partnership.For purposes of any approval required from holders of the Property Partnership’s units, if Brookfield andits subsidiaries are entitled to vote, they will be entitled to one vote per unit held subject to a maximum numberof votes equal to 49% of the total voting power of all units of the Property Partnership then issued andoutstanding.Prohibited AmendmentsNo amendment may be made that would:1. enlarge the obligations of any limited partner without its consent, except that any amendment thatwould have a material adverse effect on the rights or preferences of any class of partnershipinterests in relation to other classes of partnership interests may be approved by at least a majorityof the type or class of partnership interests so affected; or2. enlarge the obligations of, restrict in any way any action by or rights of, or reduce in any way theamounts distributable, reimbursable or otherwise payable by the Property Partnership to theProperty GP LP or any of its affiliates without the consent of the Property GP LP which may begiven or withheld in its sole discretion.The provision of the Property Partnership’s limited partnership agreement preventing the amendmentshaving the effects described in clauses (1) or (2) above can be amended upon the approval of the holders of atleast 90% of the outstanding units.153

No Limited Partner ApprovalSubject to applicable law, the Property GP LP may generally make amendments to the PropertyPartnership’s limited partnership agreement without the approval of any limited partner to reflect:1. a change in the name of the partnership, the location of the partnership’s registered office or thepartnership’s registered agent;2. the admission, substitution, withdrawal or removal of partners in accordance with the limitedpartnership agreement;3. a change that the Property GP LP determines is reasonable and necessary or appropriate for thepartnership to qualify or to continue its qualification as an exempted limited partnership under thelaws of Bermuda or a partnership in which the limited partners have limited liability under thelaws of any jurisdiction or is necessary or advisable in the opinion of the Property GP LP toensure that the Property Partnership will not be treated as an association taxable as a corporationor otherwise taxed as an entity for tax purposes;4. an amendment that the Property GP LP determines to be necessary or appropriate to addresscertain changes in tax regulations, legislation or interpretation;5. an amendment that is necessary, in the opinion of counsel, to prevent the Property Partnership orthe Property GP LP or its directors or officers, from in any manner being subjected to theprovisions of the U.S. Investment Company Act of 1940 or similar legislation in otherjurisdictions;6. an amendment that the Property GP LP determines in its sole discretion to be necessary orappropriate for the creation, authorization or issuance of any class or series of partnership interestsor options, rights, warrants or appreciation rights relating to partnership interests;7. any amendment expressly permitted in the Property Partnership’s limited partnership agreement tobe made by the Property GP LP acting alone;8. any amendment that the Property GP determines in its sole discretion to be necessary orappropriate to reflect and account for the formation by the partnership of, or its investment in, anycorporation, partnership, joint venture, limited liability company or other entity, as otherwisepermitted by the Property Partnership’s limited partnership agreement;9. a change in the Property Partnership’s fiscal year and related changes;10. any amendment concerning the computation or allocation of specific items of income, gain,expense or loss among the partners that, in the sole discretion of the Property GP LP, is necessaryor appropriate to: (i) comply with the requirements of applicable law; (ii) reflect the partners’interests in the Property Partnership; or (iii) consistently reflect the distributions made by theProperty Partnership to the partners pursuant to the terms of the limited partnership agreement ofthe Property Partnership;11. any amendment that the Property GP LP determines in its sole discretion to be necessary orappropriate to address any statute, rule, regulation, notice, or announcement that affects or couldaffect the U.S. federal income tax treatment of any allocation or distribution related to any interestof the Property GP LP in the profits of the Property Partnership; or12. any other amendments substantially similar to any of the matters described in (1) through(11) above.154

In addition, the Property GP LP may make amendments to the Property Partnership’s limited partnershipagreement without the approval of any limited partner if those amendments, in the discretion of the Property GP LP:1. do not adversely affect the Property Partnership’s limited partners considered as a whole(including any particular class of partnership interests as compared to other classes of partnershipinterests) in any material respect;2. are necessary or appropriate to satisfy any requirements, conditions or guidelines contained in anyopinion, directive, order, ruling or regulation of any governmental agency or judicial authority;3. are necessary or appropriate for any action taken by the Property GP LP relating to splits orcombinations of units under the provisions of the Property Partnership’s limited partnershipagreement; or4. are required to effect the intent expressed in this Form 20-F or the intent of the provisions of theProperty Partnership’s limited partnership agreement or are otherwise contemplated by theProperty Partnership’s limited partnership agreement.Opinion of Counsel and Limited Partner ApprovalThe Property GP LP will not be required to obtain an opinion of counsel that an amendment will notresult in a loss of limited liability to the limited partners if one of the amendments described above under “— NoLimited Partner Approval” should occur. No other amendments to the Property Partnership’s limited partnershipagreement will become effective without the approval of holders of at least 90% of the Property Partnership’sunits, unless it obtains an opinion of counsel to the effect that the amendment will not (i) cause the PropertyPartnership to be treated as an association taxable as a corporation or otherwise taxable as an entity for taxpurposes (provided that for U.S. tax purposes the Property GP LP has not made the election described belowunder “— Election to be Treated as a Corporation”), or (ii) affect the limited liability under the Bermuda LimitedPartnership Act 1883 of any of the Property Partnership’s limited partners.In addition to the above restrictions, any amendment that would have a material adverse effect on therights or preferences of any type or class of partnership interests in relation to other classes of partnershipinterests will also require the approval of the holders of at least a majority of the outstanding partnership interestsof the class so affected.In addition, any amendment that reduces the voting percentage required to take any action must beapproved by the written consent or affirmative vote of limited partners whose aggregate outstanding voting unitsconstitute not less than the voting requirement sought to be reduced.Sale or Other Disposition of AssetsThe Property Partnership’s limited partnership agreement generally prohibits the Property GP LP, withoutthe prior approval of the holders of a majority of the units of the Property Partnership, from causing the PropertyPartnership to, among other things, sell, exchange or otherwise dispose of all or substantially all of the PropertyPartnership’s assets in a single transaction or a series of related transactions, including by approving on theProperty Partnership’s behalf the sale, exchange or other disposition of all or substantially all of the assets of theProperty Partnership’s subsidiaries. However, the Property GP LP, in its sole discretion, may mortgage, pledge,hypothecate or grant a security interest in all or substantially all of the Property Partnership’s assets (includingfor the benefit of persons who are not the Property Partnership or the Property Partnership’s subsidiaries) withoutthat approval. The Property GP LP may also sell all or substantially all of the Property Partnership’s assets underany forced sale of any or all of the Property Partnership’s assets pursuant to the foreclosure or other realizationupon those encumbrances without that approval.155

Election to be Treated as a CorporationIf the Property GP LP determines that it is no longer in the Property Partnership’s best interests tocontinue as a partnership for U.S. federal income tax purposes, the Property GP LP may elect to treat theProperty Partnership as an association or as a publicly-traded partnership taxable as a corporation for U.S. federal(and applicable state) income tax purposes.DissolutionThe Property Partnership will dissolve and its affairs will be wound up upon the earlier to occur of: (i) theservice of notice by the Property GP LP, with the approval of a majority of the members of the independentdirectors of the Property General Partner, that in the opinion of the Property GP LP the coming into force of anylaw, regulation or binding authority renders illegal or impracticable the continuation of the Property Partnership;(ii) the election of the Property GP LP if the Property Partnership, as determined by the Property GP LP, isrequired to register as an “investment company” under the U.S. Investment Company Act of 1940 or similarlegislation in other jurisdictions; (iii) the date that the Property GP LP withdraws from the Property Partnership(unless a successor entity becomes the general partner of the Property Partnership as described below under“— Withdrawal of the General Partner”); (iv) the date on which any court of competent jurisdiction enters adecree of judicial dissolution of the Property Partnership or an order to wind-up or liquidate the Property GP LPwithout the appointment of a successor in compliance with the provisions of the Property Partnership’s limitedpartnership agreement that are described below under “— Withdrawal of the General Partner”; and (v) the dateon which the Property GP LP decides to dispose of, or otherwise realize proceeds in respect of, all orsubstantially all of the Property Partnership’s assets in a single transaction or series of transactions.The Property Partnership will be reconstituted and continue without dissolution if within 30 days of thedate of dissolution (and provided that a notice of dissolution with respect to the Property Partnership has not beenfiled with the Bermuda Monetary Authority), a successor general partner executes a transfer deed pursuant towhich the new general partner assumes the rights and undertakes the obligations of the original general partner,but only if the Property Partnership receives an opinion of counsel that the admission of the new general partnerwill not result in the loss of limited liability of any limited partner of the Property Partnership.Withdrawal of the General PartnerThe Property GP LP may withdraw as general partner without first obtaining approval of unitholders bygiving written notice, and that withdrawal will not constitute a violation of the limited partnership agreement.Upon the withdrawal of the Property GP LP, the holders of at least a majority of outstanding units mayselect a successor to that withdrawing general partner. If a successor is not selected, or is selected but an opinionof counsel regarding limited liability, tax matters and the U.S. Investment Company Act of 1940 (and similarlegislation in other jurisdictions) cannot be obtained, the Property Partnership will be dissolved, wound up andliquidated. See “— Dissolution” above.The Property GP LP may not be removed unless that removal is approved by the vote of the holders of atleast 66 2 ⁄3% of the outstanding class of units that are not Redemption-Exchange Units and it receives awithdrawal opinion of counsel regarding limited liability tax matters and the U.S. Investment Company Act of1940 (and similar legislation in other jurisdictions). Any removal of the Property GP LP is also subject to theapproval of a successor general partner by the vote of the holders of a majority of its outstanding units that arenot Redemption-Exchange Units.In the event of (i) the removal of a general partner under circumstances where cause exists, or (ii) thewithdrawal of a general partner as a result of certain events relating to the bankruptcy, insolvency or dissolutionof that general partner, which withdrawal will violate the Property Partnership’s limited partnership agreement, a156

successor general partner will have the option to purchase the general partnership interest of the departinggeneral partner for a cash payment equal to its fair market value. Under all other circumstances where a generalpartner withdraws or is removed by the limited partners, the departing general partner will have the option torequire the successor general partner to purchase the general partnership interest of the departing general partnerfor a cash payment equal to its fair market value. In each case, this fair market value will be determined byagreement between the departing general partner and the successor general partner. If no agreement is reachedwithin 30 days of the general partner’s departure, an independent investment banking firm or other independentexpert selected by the departing general partner and the successor general partner will determine the fair marketvalue. If the departing general partner and the successor general partner cannot agree upon an expert within45 days of the general partner’s departure, then an expert chosen by agreement of the experts selected by each ofthem will determine the fair market value.If the option described above is not exercised by either the departing general partner or the successorgeneral partner, the departing general partner’s general partnership interests will automatically convert into unitspursuant to a valuation of those interests as determined by an investment banking firm or other independentexpert selected in the manner described in the preceding paragraph.Transfer of the General Partnership InterestThe Property GP LP may transfer all or any part of its general partnership interests without first obtainingapproval of any unitholder. As a condition of this transfer, the transferee must: (i) be an affiliate of the BPYGeneral Partner (or the transfer must be made concurrently with a transfer of the general partnership units of ourcompany to an affiliate of the transferee); (ii) agree to assume the rights and duties of the general partner towhose interest that transferee has succeeded; (iii) agree to assume the provisions of the Property Partnership’slimited partnership agreement; and (iv) furnish an opinion of counsel regarding limited liability, tax matters andthe U.S. Investment Company Act of 1940 (and similar legislation in other jurisdictions). Any transfer of thegeneral partnership interest is subject to prior notice to and approval of the relevant Bermuda regulatoryauthorities. At any time, the members of the Property GP LP may sell or transfer all or part of their units in theProperty GP LP without the approval of the unitholders.Transactions with Interested PartiesThe Property GP LP, its affiliates and their respective partners, members, directors, officers, employeesand shareholders, which we refer to as “interested parties”, may become limited partners or beneficiallyinterested in limited partners and may hold, dispose of or otherwise deal with units of the Property Partnershipwith the same rights they would have if the Property GP LP and Property General Partner were not a party to thelimited partnership agreement of the Property Partnership. An interested party will not be liable to account eitherto other interested parties or to the Property Partnership, its partners or any other persons for any profits orbenefits made or derived by or in connection with any such transaction.The limited partnership agreement of the Property Partnership permits an interested party to sellinvestments to, purchase assets from, vest assets in and enter into any contract, arrangement or transaction withour company, the Property Partnership, any of the Holding Entities, any operating entity or any other holdingentity established by the Property Partnership and may be interested in any such contract, transaction orarrangement and shall not be liable to account either to the Property Partnership, any of the Holding Entities, anyoperating entity or any other holding entity established by the Property Partnership or any other person in respectof any such contract, transaction or arrangement, or any benefits or profits made or derived therefrom, by virtueonly of the relationship between the parties concerned, subject to the bye-laws of the Property General Partner.157

Outside Activities of the General PartnerUnder the Property Partnership’s limited partnership agreement, the general partner is required tomaintain as its sole activity the activity of acting as the general partner of the Property Partnership. The generalpartner is not permitted to engage in any business or activity or incur or guarantee any debts or liabilities exceptin connection with or incidental to its performance as general partner or incurring, guaranteeing, acquiring,owning or disposing of debt or equity securities of a subsidiary of an Holding Entity or any other holding entityestablished by the Property Partnership.The Property Partnership’s limited partnership agreement provides that each person who is entitled to beindemnified by the partnership (other than the general partner), as described below under “— Indemnification;Limitations on Liability” will have the right to engage in businesses of every type and description and otheractivities for profit, and to engage in and possess interests in business ventures of any and every type ordescription, irrespective of whether: (i) such businesses and activities are similar to our activities; or (ii) suchbusinesses and activities directly compete with, or disfavor or exclude, the Property General Partner, the PropertyGP LP, the Property Partnership, any Holding Entity, any operating entity, or any other holding entity establishedby the Property Partnership. Such business interests, activities and engagements will be deemed not to constitutea breach of the limited partnership agreement or any duties stated or implied by law or equity, including fiduciaryduties, owed to any of the Property General Partner, the Property GP LP, the Property Partnership, any HoldingEntity, any operating entity, and any other holding entity established by the Property Partnership (or any of theirrespective investors), and shall be deemed not to be a breach of the Property General Partner’s fiduciary duties orany other obligation of any type whatsoever of the general partner. None of the Property General Partner, theProperty GP LP, the Property Partnership, any Holding Entity, operating entity, any other holding entityestablished by the Property Partnership or any other person shall have any rights by virtue of the PropertyPartnership’s limited partnership agreement or the partnership relationship established thereby or otherwise inany business ventures of any person who is entitled to be indemnified by the Property Partnership as describedbelow under “— Indemnification; Limitations on Liability”.The Property GP LP and the other indemnified persons described in the preceding paragraph do not haveany obligation under the Property Partnership’s limited partnership agreement or as a result of any duties statedor implied by law or equity, including fiduciary duties, to present business or investment opportunities to theProperty Partnership, the limited partners of the Property Partnership, any Holding Entity, operating entity, orany other holding entity established by the Property Partnership. These provisions do not affect any obligation ofsuch indemnified person to present business or investment opportunities to our company, the PropertyPartnership, any Holding Entity, any operating entity or any other holding entity established by the PropertyPartnership pursuant to the Relationship Agreement or any separate written agreement between such persons.Accounts, Reports and Other InformationUnder the Property Partnership’s limited partnership agreement, the Property GP LP is required toprepare financial statements in accordance with IFRS or such other appropriate accounting principles asdetermined from time to time by the Property GP LP, in its sole discretion. The Property GP LP will deliver toour company: (i) the annual financial statements of the Property Partnership and (ii) the accounts and financialstatements of any Holding Entity or any other holding entity established by the Property Partnership.The Property GP LP is also required to use commercially reasonable efforts to prepare and send to thelimited partners of the Property Partnership on an annual basis a Schedule K-1 (or equivalent). The Property GPLP will also, where reasonably possible, prepare and send information required by the non-U.S. limited partnersof the Property Partnership for U.S. federal income tax reporting purposes.158

Indemnification; Limitations on LiabilityUnder the Property Partnership’s limited partnership agreement, it is required to indemnify to the fullestextent permitted by law the Property General Partner, the Property GP LP and any of their respective affiliates(and their respective officers, directors, agents, shareholders, partners, members and employees), any person whoserves on a governing body of the Property Partnership, a Holding Entity, operating entity or any other holdingentity established by our company and any other person designated by its general partner as an indemnifiedperson, in each case, against all losses, claims, damages, liabilities, costs or expenses (including legal fees andexpenses), judgments, fines, penalties, interest, settlements and other amounts arising from any and all claims,demands, actions, suits or proceedings, incurred by an indemnified person in connection with its business,investments and activities or by reason of their holding such positions, except to the extent that the claims,liabilities, losses, damages, costs or expenses are determined to have resulted from the indemnified person’s badfaith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnified person knew tohave been unlawful. In addition, under the Property Partnership’s limited partnership agreement: (i) the liabilityof such persons has been limited to the fullest extent permitted by law, except to the extent that their conductinvolves bad faith, fraud or willful misconduct, or in the case of a criminal matter, action that the indemnifiedperson knew to have been unlawful; and (ii) any matter that is approved by the independent directors will notconstitute a breach of any duties stated or implied by law or equity, including fiduciary duties. The PropertyPartnership’s limited partnership agreement requires it to advance funds to pay the expenses of an indemnifiedperson in connection with a matter in which indemnification may be sought until it is determined that theindemnified person is not entitled to indemnification.Governing LawThe Property Partnership’s limited partnership agreement is governed by and will be construed inaccordance with the laws of Bermuda.10.C. MATERIAL CONTRACTSThe following are the only material contracts, other than contracts entered into in the ordinary course ofbusiness, which have been entered into by us since our formation or which are proposed to be entered into by us:1. Master Purchase Agreement described under Item 4.A. “Information on the Company — Historyand Development of the Company — The Spin-Off”;2. Master Services Agreement by and among Brookfield Asset Management, the Service Recipientsand the Managers described under Item 7.B. “Major Shareholders and Related Party Transactions— Related Party Transactions — Our Master Services Agreement”;3. Relationship Agreement by and among Brookfield Asset Management, our company and theManagers and others described under Item 7.B. “Major Shareholders and Related PartyTransactions — Related Party Transactions — Relationship with Brookfield — RelationshipAgreement”;4. Registration Rights Agreement between our company and Brookfield Asset Managementdescribed under the heading Item 7.B. “Major Shareholders and Related Party Transactions —Related Party Transactions — Relationship with Brookfield — Registration Rights Agreement”;5. Voting Agreement between Brookfield Asset Management, the Property General Partner and ourcompany described under Item 7.B. “Major Shareholders and Related Party Transactions —Related Party Transactions — Voting Agreements”;159

6. Amended and Restated Limited Partnership Agreement of our partnership described underItem 10.B. “Additional Information — Memorandum and Articles of Association — Descriptionof Our Units and Our Limited Partnership Agreement”; and7. Amended and Restated Limited Partnership Agreement of the Property Partnership describedunder Item 10.B. “Additional Information — Memorandum and Articles of Association —Description of the Property Partnership Limited Partnership Agreement”.Copies of the agreements noted above, following execution where not executed, will be made available,free of charge, by the BPY General Partner and will be available electronically on the website of the SEC atwww.sec.gov and on our SEDAR profile at www.sedar.com. Written requests for such documents should bedirected to our Corporate Secretary at 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda.10.D. EXCHANGE CONTROLSThere are currently no governmental laws, decrees, regulations or other legislation of Bermuda whichrestrict the import or export of capital or the remittance of dividends, interest or other payments to non-residentsof Bermuda holding our units.10.E. TAXATIONThe following summary discusses certain material U.S., Canadian, and Bermudian tax considerationsrelated to the receipt, holding, and disposition of our units as of the date hereof to a holder who receives our unitspursuant to the spin-off. Prospective purchasers of our units are advised to consult their own tax advisersconcerning the consequences under the tax laws of the country of which they are resident or in which they areotherwise subject to tax of making an investment in our units.U.S. Tax ConsiderationsThis summary discusses certain material U.S. federal income tax considerations to unitholders relating tothe receipt, holding, and disposition of our units as of the date hereof. This summary is based on provisions of theU.S. Internal Revenue Code of 1986, as amended, or the U.S. Internal Revenue Code, on the regulationspromulgated thereunder, and on published administrative rulings, judicial decisions, and other applicableauthorities, all as in effect on the date hereof and all of which are subject to change at any time, possibly withretroactive effect. This summary is necessarily general and may not apply to all categories of investors, some ofwhich may be subject to special rules, including, without limitation, persons that own (directly or indirectly,applying certain attribution rules) more than 5% of our units, persons that own (directly or indirectly, applyingcertain attribution rules) more than 5% of any U.S. entity classified as a real estate investment trust for U.S.federal tax purposes in which we own (directly or indirectly) an interest, dealers in securities or currencies,financial institutions or financial services entities, life insurance companies, persons that hold our units as part ofa straddle, hedge, constructive sale or conversion transaction with other investments, persons whose functionalcurrency is not the U.S. Dollar, persons who have elected mark-to-market accounting, persons who hold our unitsthrough a partnership or other entity treated as a pass-through entity for U.S. federal income tax purposes,persons for whom our units are not a capital asset, persons who are liable for the alternative minimum tax andcertain U.S. expatriates or former long-term residents of the U.S. Tax-exempt organizations are addressedseparately below. The actual tax consequences of the receipt of our units pursuant to the spin-off and of theownership and disposition of our units will vary depending on your individual circumstances.For purposes of this discussion, a “U.S. Holder” is a beneficial owner of one or more of our units that isfor U.S. federal income tax purposes: (i) an individual citizen or resident of the United States; (ii) a corporation(or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under thelaws of the United States, any state thereof or the District of Columbia; (iii) an estate the income of which is160

subject to U.S. federal income taxation regardless of its source; or (iv) a trust (a) that is subject to the primarysupervision of a court within the United States and all substantial decisions of which one or more U.S. personshave the authority to control or (b) that has a valid election in effect under applicable U.S. Treasury regulationsto be treated as a U.S. person.A “Non-U.S. Holder” is a beneficial owner of one or more of our units, other than a U.S. Holder or anentity classified as a partnership or other fiscally transparent entity for U.S. federal tax purposes.If a partnership holds our units, the tax treatment of a partner of such partnership generally will dependupon the status of the partner and the activities of the partnership. Partners of partnerships that hold our unitsshould consult an independent tax adviser.This discussion does not constitute tax advice and is not intended to be a substitute for tax planning.You should consult an independent tax adviser concerning the U.S. federal, state and local income taxconsequences particular to your receipt of our units pursuant to the spin-off and your ownership anddisposition of our units, as well as any consequences under the laws of any other taxing jurisdiction.Partnership Status of Our Company and the Property PartnershipEach of our company and the Property Partnership has made a protective election to be classified as apartnership for U.S. federal tax purposes. An entity that is treated as a partnership for U.S. federal tax purposesincurs no U.S. federal income tax liability. Instead, each partner is required to take into account its allocableshare of items of income, gain, loss, deduction, or credit of the partnership in computing its U.S. federal incometax liability, regardless of whether cash distributions are made. Distributions of cash by a partnership to a partnergenerally are not taxable unless the amount of cash distributed to a partner is in excess of the partner’s adjustedbasis in its partnership interest.An entity that would otherwise be classified as a partnership for U.S. federal income tax purposes maynonetheless be taxable as a corporation if it is a “publicly-traded partnership”, unless an exception applies. Ourcompany will be publicly-traded. However, an exception, referred to as the “Qualifying Income Exception”,exists with respect to a publicly-traded partnership if (i) at least 90% of such partnership’s gross income for everytaxable year consists of “qualifying income” and (ii) the partnership would not be required to register under theU.S. Investment Company Act of 1940 if it were a U.S. corporation. Qualifying income includes certain interestincome, dividends, real property rents, gains from the sale or other disposition of real property, and any gainfrom the sale or disposition of a capital asset or other property held for the production of income that otherwiseconstitutes qualifying income.The BPY General Partner and the Property General Partner intend to manage the affairs of our companyand the Property Partnership, respectively, so that our company will meet the Qualifying Income Exception ineach taxable year. Accordingly, the BPY General Partner believes that our company will be treated as apartnership and not as a corporation for U.S. federal income tax purposes.If our company fails to meet the Qualifying Income Exception, other than a failure which is determinedby the U.S. Internal Revenue Service, or the IRS, to be inadvertent and which is cured within a reasonable timeafter discovery, or if our company is required to register under the U.S. Investment Company Act of 1940, ourcompany will be treated as if it had transferred all of its assets, subject to liabilities, to a newly formedcorporation, on the first day of the year in which our company fails to meet the Qualifying Income Exception, inreturn for stock in such corporation, and then distributed the stock to our unitholders in liquidation. This deemedcontribution and liquidation likely would result in the recognition of gain (but not loss) to U.S. Holders, exceptthat U.S. Holders generally would not recognize the portion of such gain attributable to stock or securities ofnon-U.S. corporations held by us. If, at the time of such contribution, our company were to have liabilities inexcess of the tax basis of its assets, U.S. Holders generally would recognize gain in respect of such excess161

liabilities upon the deemed transfer. Thereafter, our company would be treated as a corporation for U.S. federalincome tax purposes.If our company were treated as a corporation in any taxable year, either as a result of a failure to meet theQualifying Income Exception or otherwise, our company’s items of income, gain, loss, deduction, or creditwould be reflected only on our company’s tax return rather than being passed through to our unitholders, and ourcompany would be subject to U.S. corporate income tax and potentially branch profits tax with respect to itsincome, if any, effectively connected with a U.S. trade or business. Moreover, under certain circumstances, ourcompany might be classified as a passive foreign investment company, or PFIC, for U.S. federal income taxpurposes, and a U.S. Holder would be subject to the rules applicable to PFICs discussed below. See “—Consequences to U.S. Holders — Passive Foreign Investment Companies”. Subject to the PFIC rules,distributions made to U.S. Holders would be treated as taxable dividend income to the extent of our company’scurrent or accumulated earnings and profits. Any distribution in excess of current and accumulated earnings andprofits would first be treated as a tax-free return of capital to the extent of a U.S. Holder’s adjusted tax basis in itsunits. Thereafter, to the extent such distribution were to exceed a U.S. Holder’s adjusted tax basis in its units, thedistribution would be treated as gain from the sale or exchange of such units. The amount of a distribution madebefore January 1, 2013 and treated as a dividend could be eligible for reduced rates of taxation, provided certainconditions are met. In addition, dividends, interest and certain other passive income received by our companywith respect to U.S. investments generally would be subject to U.S. withholding tax at a rate of 30% (althoughcertain Non-U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of their allocableshare of such income) and U.S. Holders would not be allowed a tax credit with respect to any such tax withheld.In addition, the “portfolio interest” exemption would not apply to certain interest income of our company(although certain Non-U.S. Holders nevertheless might be entitled to certain treaty benefits in respect of theirallocable share of such income).Based on the foregoing consequences, treatment of our company as a corporation could materially reducea holder’s after-tax return and therefore could result in a substantial reduction of the value of our units. If theProperty Partnership were to be treated as a corporation for U.S. federal income tax purposes, consequencessimilar to those described above would apply.The remainder of this summary assumes that our company and the Property Partnership will be treated aspartnerships for U.S. federal tax purposes. We expect that a substantial portion of the items of income, gain,deduction, loss, or credit realized by our company will be realized in the first instance by the PropertyPartnership and allocated to our company for reallocation to our unitholders. Unless otherwise specified,references in this section to realization of our company’s items of income, gain, loss, deduction, or credit includea realization of such items by the Property Partnership (or other lower tier partnership) and the allocation of suchitems to our company.Proposed LegislationOver the past several years, a number of legislative and administrative proposals relating to partnershiptaxation have been introduced and, in certain cases, have been passed by the U.S. House of Representatives. OnMay 28, 2010, the U.S. House of Representatives passed legislation which, if it had been finally enacted into lawand applied to our company or to the Property Partnership, could have had adverse consequences, including(i) the recharacterization of capital gain income as “ordinary income”, (ii) the potential reclassification ofqualified dividend income as “ordinary income” subject to a higher rate of U.S. income tax, and (iii) potentiallimitations on the ability of our company to meet the “qualifying income” exception for taxation as a partnershipfor U.S. federal income tax purposes. This legislation was not passed by the U.S. Senate and therefore was notenacted into law. However, substantially similar legislation was reintroduced in the U.S. House ofRepresentatives in February 2012.The Obama administration has indicated it supports the adoption of legislation that similarly changes thetreatment of carried interest for U.S. federal income tax purposes. In its published revenue proposals for 2013,162

the Obama administration proposes that the current law governing the treatment of carried interest be changed fortaxable years ending after December 31, 2012, to subject such income to ordinary income tax. The Obamaadministration’s published revenue proposals for previous years contained similar proposals.It remains unclear whether any legislation related to such revenue proposals or similar to the legislationdescribed above will be proposed or enacted by the U.S. Congress and, if enacted, whether such legislationwould affect an investment in our company. You should consult an independent tax adviser as to the potentialeffect of any proposed or future legislation on an investment in our company.The remainder of this discussion is based on current law without regard to the proposed legislation oradministrative proposals discussed above.Consequences to U.S. HoldersSpin-OffA U.S. Holder who receives our units pursuant to the spin-off will be considered to have received ataxable distribution in an amount equal to the fair market value of the gross amount of our units received by suchholder plus the amount of cash received in lieu of fractional units, without reduction for any Canadian taxwithheld in respect of the spin-off. This distribution would be treated as a dividend, taxable as ordinary income,to the extent of your share of current and accumulated earnings and profits of Brookfield Asset Management asdetermined for U.S. federal income tax purposes (which Brookfield Asset Management does not calculate). Ifyou are a non-corporate U.S. Holder, including an individual, the amount of the dividend received by yougenerally would be “qualified dividend income” subject to U.S. tax at preferential rates, provided BrookfieldAsset Management is not a PFIC for the taxable year in which the dividend is distributed or for the precedingtaxable year, you received the dividend in respect of Class A limited voting shares that are readily tradable on anestablished securities market in the United States (such as the NYSE), and the following additional requirementsare met: (i) you do not treat the dividend as “investment income” for purpose of the rules limiting deductions forinvestment interest, (ii) you have held the shares of stock in respect of which such dividend was made for at least61 days during the 121-day period beginning 60 days before the ex-dividend date, and (iii) you satisfy certainat-risk requirements and other rules. Based upon the composition of its income and its assets, Brookfield AssetManagement does not believe that it is a PFIC for the current taxable year or for the preceding taxable year.However, no assurance can be provided that the IRS will agree with such position.If the amount of the distribution were to exceed Brookfield Asset Management’s current and accumulatedearnings and profits, the excess would be treated as a recovery of basis to the extent of your basis in BrookfieldAsset Management shares and then as capital gain. Because Brookfield Asset Management does not calculateearnings and profits for U.S. tax purposes, however, you should expect not to be able to establish that any portionof the distribution would be treated as recovery of basis or capital gain.If you fail to timely provide Brookfield Asset Management with a properly completed IRS Form W-9,you may be subject to “backup” withholding tax on the distribution, unless you come within certain exemptcategories of recipients and, when required, demonstrate that status. Backup withholding is not an additional tax,and any amounts withheld under the “backup” withholding rules will be allowed as a credit against your U.S.federal income tax liability (or as a refund if in excess of such liability), provided the required information istimely furnished to the IRS. You should consult an independent tax adviser regarding the application of theforegoing rules to you.Dividends received by you pursuant to the spin-off generally will be treated as foreign source income forforeign tax credit limitation purposes. Accordingly, any Canadian federal withholding tax assessed on dividendsreceived by you pursuant to the spin-off may, subject to certain limitations, be claimed as a foreign tax creditagainst your U.S. federal income tax liability or may be claimed as a deduction for U.S. federal income tax163

purposes. Notwithstanding the foregoing, the rules relating to foreign tax credits are complex, and the availabilityof a foreign tax credit depends on numerous factors. You should consult an independent tax adviser concerningthe application of the U.S. foreign tax credit rules to you.Holding of Our UnitsIncome and Loss. If you are a U.S. Holder, you will be required to take into account, as described below,your allocable share of our company’s items of income, gain, loss, deduction, and credit for each of ourcompany’s taxable years ending with or within your taxable year. Each item generally will have the samecharacter and source as though you had realized the item directly. You must report such items without regard towhether any distribution has been or will be received from our company. Our company intends to make cashdistributions to all unitholders on a quarterly basis in amounts generally expected to be sufficient to permit U.S.Holders to fund their estimated U.S. tax obligations (including U.S. federal, state, and local income taxes) withrespect to their allocable shares of our company’s net income or gain. However, based upon your particular taxsituation and simplifying assumptions that our company will make in determining the amount of suchdistributions, and depending upon whether you elect to reinvest such distributions pursuant to the distributionreinvestment plan, if available, your tax liability might exceed cash distributions made to you, in which case anytax liabilities arising from your ownership of our units would need to be satisfied from your own funds.With respect to U.S. Holders who are individuals, certain dividends paid by a corporation (includingcertain qualified foreign corporations) to our company and that are allocable to such U.S. Holders prior toJanuary 1, 2013 may qualify for reduced rates of taxation. A qualified foreign corporation includes a foreigncorporation that is eligible for the benefits of specified income tax treaties with the United States. In addition, aforeign corporation is treated as a qualified corporation with respect to its shares that are readily tradable on anestablished securities market in the United States. Among other exceptions, U.S. Holders who are individualswill not be eligible for reduced rates of taxation on any dividends if the payer is a PFIC for the taxable year inwhich such dividends are paid or for the preceding taxable year. U.S. Holders that are corporations may beentitled to a “dividends received deduction” in respect of dividends paid by U.S. corporations in which ourcompany (through the Property Partnership) owns stock. You should consult an independent tax adviserregarding the application of the foregoing rules in light of your particular circumstances.For U.S. federal income tax purposes, your allocable share of our company’s items of income, gain, loss,deduction, or credit will be governed by our limited partnership agreement if such allocations have “substantialeconomic effect” or are determined to be in accordance with your interest in our company. Similarly, ourcompany’s allocable share of items of income, gain, loss, deduction, or credit of the Property Partnership will begoverned by the limited partnership agreement of the Property Partnership if such allocations have “substantialeconomic effect” or are determined to be in accordance with our company’s interest in the Property Partnership.The BPY General Partner and the Property General Partner believe that, for U.S. federal income tax purposes,such allocations should be given effect, and the BPY General Partner and the Property General Partner intend toprepare tax returns based on such allocations. If the IRS were to successfully challenge the allocations madepursuant to either our company’s limited partnership agreement or the limited partnership agreement of theProperty Partnership, then the resulting allocations for U.S. federal income tax purposes might be less favorablethan the allocations set forth in such agreements.Basis. You will have an initial tax basis in your units equal to their fair market value on the date youreceive them pursuant to the spin-off, increased by your share of our company’s liabilities, if any. That basis willbe increased by your share of our company’s income and by increases in your share of our company’s liabilities,if any. That basis will be decreased, but not below zero, by distributions you receive from our company, by yourshare of our company’s losses, and by any decrease in your share of our company’s liabilities. Under applicableU.S. federal income tax rules, a partner in a partnership has a single, or “unitary”, tax basis in his or herpartnership interest, unlike a shareholder of a corporation. As a result, any amount you pay to acquire additionalunits (including through the distribution reinvestment plan, if available) will be averaged with the adjusted tax164

asis of units owned by you prior to the acquisition of such additional units. The BPY General Partner expressesno opinion regarding the appropriate methodology to be used in making this determination.For purposes of the foregoing rules, the rules discussed immediately below, and the rules applicable to asale or exchange of our units, our company’s liabilities generally will include our company’s share of anyliabilities of the Property Partnership.Limits on Deductions for Losses and Expenses. Your deduction of your allocable share of ourcompany’s losses will be limited to your tax basis in our units and, if you are an individual or a corporate holderthat is subject to the “at risk” rules, to the amount for which you are considered to be “at risk” with respect to ourcompany’s activities, if that is less than your tax basis. In general, you will be at risk to the extent of your taxbasis in our units, reduced by (i) the portion of that basis attributable to your share of our company’s liabilitiesfor which you will not be personally liable (excluding certain qualified non-recourse financing) and (ii) anyamount of money you borrow to acquire or hold our units, if the lender of those borrowed funds owns an interestin our company, is related to you, or can look only to your units for repayment. Your at-risk amount generallywill increase by your allocable share of our company’s income and gain and decrease by distributions youreceive from our company and your allocable share of losses and deductions. You must recapture losses deductedin previous years to the extent that distributions cause your at-risk amount to be less than zero at the end of anytaxable year. Losses disallowed or recaptured as a result of these limitations will carry forward and will beallowable to the extent that your tax basis or at-risk amount, whichever is the limiting factor, subsequentlyincreases. Upon the taxable disposition of our units, any gain recognized by you can be offset by losses that werepreviously suspended by the at-risk limitation, but may not be offset by losses suspended by the basis limitation.Any excess loss above the gain previously suspended by the at-risk or basis limitations may no longer be used.You should consult an independent tax adviser as to the effects of the at-risk rules.Limitations on Deductibility of Organizational Expenses and Syndication Fees. In general, neitherour company nor any U.S. Holder may deduct organizational or syndication expenses. Similar rules apply toorganizational or syndication expenses incurred by the Property Partnership. Syndication fees (which wouldinclude any sales or placement fees or commissions) must be capitalized and cannot be amortized or otherwisededucted.Limitations on Interest Deductions. Your share of our company’s interest expense is likely to be treatedas “investment interest” expense. For a non-corporate U.S. Holder, the deductibility of “investment interest”expense is generally limited to the amount of such holder’s “net investment income”. Your share of ourcompany’s dividend and interest income will be treated as investment income, although “qualified dividendincome” subject to reduced rates of tax in the hands of an individual will only be treated as investment income ifsuch individual elects to treat such dividend as ordinary income not subject to reduced rates of tax. In addition,state and local tax laws may disallow deductions for your share of our company’s interest expense.Net investment income includes gross income from property held for investment and amounts treated asportfolio income under the passive loss rules, less deductible expenses, other than interest, directly connectedwith the production of investment income, but generally does not include gains attributable to the disposition ofproperty held for investment.Deductibility of Partnership Investment Expenditures by Individual Partners and by Trusts andEstates. Subject to certain exceptions, all miscellaneous itemized deductions of an individual taxpayer, andcertain of such deductions of an estate or trust, are deductible only to the extent that such deductions exceed 2%of the taxpayer’s adjusted gross income. Moreover, absent U.S. Congressional action, in taxable years beginningon or after January 1, 2013, the otherwise allowable itemized deductions of individuals whose gross incomeexceeds an applicable threshold amount are subject to reduction by an amount equal to the lesser of (i) 3% of theexcess of the individual’s adjusted gross income over the threshold amount, or (ii) 80% of the amount of theindividual’s itemized deductions. The operating expenses of our company, including our company’s allocable165

share of the base management fee or any other management fees, may be treated as miscellaneous itemizeddeductions subject to the foregoing rule. Alternatively, it is possible that our company and the PropertyPartnership will be required to capitalize amounts paid in respect of certain management fees. Accordingly, ifyou are a non-corporate U.S. Holder, you should consult an independent tax adviser regarding the application ofthese limitations.Treatment of DistributionsDistributions of cash by our company generally will not be taxable to you to the extent of your adjustedtax basis (described above) in our units. Any cash distributions in excess of your adjusted tax basis generally willbe considered to be gain from the sale or exchange of our units (described below). Under current law, such gaingenerally would be treated as capital gain and would be long-term capital gain if your holding period for ourunits were to exceed one year. A reduction in your allocable share of our liabilities, and certain distributions ofmarketable securities by our company, would be treated similar to cash distributions for U.S. federal income taxpurposes.Sale or Exchange of Our UnitsYou will recognize gain or loss on the sale or taxable exchange of our units equal to the difference, if any,between the amount realized and your tax basis in our units sold or exchanged. Your amount realized will bemeasured by the sum of the cash or the fair market value of other property received plus your share of ourcompany’s liabilities, if any.Gain or loss recognized by you upon the sale or exchange of our units generally will be taxable as capitalgain or loss and will be long-term capital gain or loss if you held our units for more than one year as of the dateof such sale or exchange. Assuming you have not elected to treat your share of our company’s investment in anyPFIC as a “qualified electing fund”, gain attributable to such investment in a PFIC would be taxable in themanner described below in “—Passive Foreign Investment Companies”. In addition, certain gain attributable to“unrealized receivables” or “inventory items” could be characterized as ordinary income rather than capital gain.For example, if our company were to hold debt acquired at a market discount, accrued market discount on suchdebt would be treated as “unrealized receivables”. The deductibility of capital losses is subject to limitations.Each U.S. Holder who acquires our units at different times and intends to sell all or a portion of our unitswithin a year of the most recent purchase should consult an independent tax adviser regarding the application ofcertain “split holding period” rules to such sale and the treatment of any gain or loss as long-term or short-termcapital gain or loss.Foreign Tax Credit LimitationsIf you are a U.S. Holder, you generally will be entitled to a foreign tax credit with respect to yourallocable share of creditable foreign taxes paid on our company’s income and gain. Complex rules may,depending on your particular circumstances, limit the availability or use of foreign tax credits. Gain from the saleof our company’s investments may be treated as U.S.-source gain. Consequently, you may not be able to use theforeign tax credit arising from any foreign taxes imposed on such gain unless the credit can be applied (subject toapplicable limitations) against U.S. tax due on other income treated as derived from foreign sources. Certainlosses that our company incurs may be treated as foreign-source losses, which could reduce the amount offoreign tax credits otherwise available.Section 754 ElectionOur company and the Property Partnership each intend to make the election permitted by Section 754 ofthe U.S. Internal Revenue Code, or the Section 754 Election. The Section 754 Election is irrevocable without the166

consent of the IRS. The Section 754 Election generally requires our company to adjust the tax basis in its assets,or inside basis, attributable to a transferee of our units under Section 743(b) of the U.S. Internal Revenue Code toreflect the purchase price paid by the transferee for our units. This election does not apply to a person whopurchases units directly from us. For purposes of this discussion, a transferee’s inside basis in our company’sassets will be considered to have two components: (i) the transferee’s share of our company’s tax basis in ourcompany’s assets, or common basis, and (ii) the adjustment under Section 743(b) of the U.S. Internal RevenueCode to that basis. The foregoing rules would also apply to the Property Partnership.Generally, a Section 754 Election would be advantageous to a transferee U.S. Holder if such holder’s taxbasis in its units were higher than such units’ share of the aggregate tax basis of our company’s assetsimmediately prior to the transfer. In that case, as a result of the Section 754 Election, the transferee U.S. Holderwould have a higher tax basis in its share of our company’s assets for purposes of calculating, among other items,such holder’s share of any gain or loss on a sale of our company’s assets. Conversely, a Section 754 Electionwould be disadvantageous to a transferee U.S. Holder if such holder’s tax basis in its units were lower than suchunits’ share of the aggregate tax basis of our company’s assets immediately prior to the transfer. Thus, the fairmarket value of our units may be affected either favorably or adversely by the election.Whether or not the Section 754 Election is made, if our units are transferred at a time when our companyhas a “substantial built-in loss” in its assets, our company will be obligated to reduce the tax basis in the portionof such assets attributable to such units.The calculations involved in the Section 754 Election are complex, and the BPY General Partner and theProperty GP LP advise that they will make them on the basis of assumptions as to the value of our assets andother matters. Each U.S. Holder should consult an independent tax adviser as to the effects of the Section 754Election.Uniformity of Our UnitsBecause we cannot match transferors and transferees of our units, we must maintain uniformity of theeconomic and tax characteristics of our units to a purchaser of our units. In the absence of uniformity, we may beunable to comply fully with a number of U.S. federal income tax requirements. A lack of uniformity can resultfrom a literal application of certain U.S. Treasury regulations to our company’s Section 743(b) adjustments, thedetermination that our company’s Section 704(c) allocations are unreasonable, or other reasons. Section 704(c)allocations would be intended to reduce or eliminate the disparity between tax basis and the value of ourcompany’s assets in certain circumstances, including on the issuance of additional units. In order to maintain thefungibility of all of our units at all times, we will seek to achieve the uniformity of U.S. tax treatment for allpurchasers of our units which are acquired at the same time and price (irrespective of the identity of the particularseller of our units or the time when our units are issued), through the application of certain tax accountingprinciples that the BPY General Partner believes are reasonable for our company. However, the IRS maydisagree with us and may successfully challenge our application of such tax accounting principles. Anynon-uniformity could have a negative impact on the value of our units.Foreign Currency Gain or LossOur company’s functional currency will be the U.S. Dollar, and our company’s income or loss will becalculated in U.S. Dollars. It is likely that our company will recognize “foreign currency” gain or loss withrespect to transactions involving non-U.S. Dollar currencies. In general, foreign currency gain or loss is treated asordinary income or loss. You should consult an independent tax adviser regarding the tax treatment of foreigncurrency gain or loss.Passive Foreign Investment CompaniesU.S. Holders may be subject to special rules applicable to indirect investments in foreign corporations,including an investment through our company in a PFIC. A PFIC is defined as any foreign corporation with167

espect to which (after applying certain look-through rules) either (i) 75% or more of its gross income for ataxable year is “passive income” or (ii) 50% or more of its assets in any taxable year (generally based on thequarterly average of the value of its assets) produce or are held for the production of “passive income”. There areno minimum stock ownership requirements for PFICs. If you hold an interest in a foreign corporation for anytaxable year during which the corporation is classified as a PFIC with respect to you, then the corporation willcontinue to be classified as a PFIC with respect to you for any subsequent taxable year during which youcontinue to hold an interest in the corporation, even if the corporation’s income or assets would not cause it to bea PFIC in such subsequent taxable year, unless an exception applies.Subject to certain exceptions described below, any gain on the disposition of stock of a PFIC owned byyou indirectly through our company, as well as income realized on certain “excess distributions” by such PFIC,would be treated as though realized ratably over the shorter of your holding period of our units or our company’sholding period for the PFIC. Such gain or income generally would be taxable as ordinary income, and dividendspaid by the PFIC would not be eligible for the preferential tax rate for dividends paid to non-corporate U.S.Holders. In addition, an interest charge would apply, based on the tax deferred from prior years.If you were to make an election to treat your share of our company’s interest in a PFIC as a “qualifiedelecting fund”, such election a “QEF election”, for the first year you were treated as holding such interest, then inlieu of the foregoing treatment, you would be required to include in income each year a portion of the ordinaryearnings and net capital gains of the PFIC, even if not distributed to our company or to you. A QEF election mustbe made by you on an entity-by-entity basis. To make a QEF election, you must, among other things, (i) obtain aPFIC annual information statement (through an intermediary statement supplied by our company) and(ii) prepare and submit IRS Form 8621 with your annual income tax return.Once you have made a QEF election for an entity, such election applies to any additional shares ofinterest in such entity acquired directly or indirectly, including through additional units acquired after the QEFelection is made (such as units acquired under the distribution reinvestment plan, if available). If you were tomake a QEF election after the first year that you were treated as holding an interest in a PFIC, the adverse taxconsequences relating to PFIC stock would continue to apply with respect to the pre-QEF election period, unlessyou were to make a “purging election”. The purging election would create a deemed sale of your previously heldshare of our company’s interests in a PFIC. The gain recognized by the purging election would be subject to thespecial tax and interest charge rules, which treat the gain as an excess distribution, as described above. As a resultof the purging election, you would have a new basis and holding period in your share of our company’s interestsin the PFIC. You should consult an independent tax adviser as to the manner in which such direct inclusionscould affect your allocable share of our company’s income and your tax basis in our units and the advisability ofmaking a QEF election or a purging election.Alternatively, in the case of a PFIC that is a publicly-traded foreign company, an election may be made to“mark to market” the stock of such foreign company on an annual basis. Pursuant to such an election, you wouldinclude in each year as ordinary income the excess, if any, of the fair market value of such stock over its adjustedbasis at the end of the taxable year. The BPY General Partner and the Property General Partner currently believeit is possible that one or more of our existing or future operating entities will qualify as PFICs that are publiclytraded.However, there can be no assurance in this regard. You should consult an independent tax adviserregarding the availability of the mark-to-market election with respect to any PFIC in which you are treated asowning an interest through our company.Based on our organizational structure following the spin-off, as well as our company’s expected incomeand assets, the BPY General Partner and the Property General Partner currently believe that one or more of ourexisting Holding Entities and operating entities are likely to be classified as PFICs. Moreover, we may in thefuture acquire certain investments or operating entities through one or more Holding Entities treated ascorporations for U.S. federal income tax purposes, and such future Holding Entities or other companies in whichwe acquire an interest may be treated as PFICs. In addition, in order to ensure that we satisfy the Qualifying168

Income Exception, we may determine to hold an existing or future operating entity through a Holding Entity thatwould be classified as a PFIC. See “—Investment Structure” below.There can be no assurance that an investment in PFIC stock will be eligible for the mark-to-marketelection. However, to the extent reasonably practicable, we intend to timely provide you with the informationnecessary to make a QEF election with respect to any entity that the BPY General Partner and the PropertyGeneral Partner believe is a PFIC with respect to you. Accordingly, you are urged to consider timely filing a QEFelection with respect to each such entity for which our company provides the necessary information. Any suchelection should be made for the first year our company holds an interest in such entity or for the first year inwhich you hold our units, if later.Recently enacted U.S. legislation requires each U.S. person who directly or indirectly owns an interest ina PFIC to file an annual report with the IRS, and the failure to file such report could result in the imposition ofpenalties on such U.S. person and in the extension of the statute of limitations with respect to federal income taxreturns filed by such U.S. person. However, this reporting requirement has been temporarily suspended. Youshould consult an independent tax adviser regarding the PFIC rules, including the potential effect of thislegislation on your filing requirements and the advisability of making a QEF election or, if applicable, amark-to-market election, with respect to any PFIC in which you are treated as owning an interest through ourcompany.Investment StructureTo ensure that our company meets the Qualifying Income Exception for publicly-traded partnerships(discussed above) and complies with certain requirements in its limited partnership agreement, we may structurecertain investments through an entity classified as a corporation for U.S. federal income tax purposes. Suchinvestment structures will be entered into as determined in the sole discretion of the BPY General Partner and theProperty General Partner in order to create a tax structure that generally is efficient for our unitholders. However,because our unitholders will be located in numerous taxing jurisdictions, no assurance can be given that any suchinvestment structure will benefit all our unitholders to the same extent, and such an investment structure mighteven result in additional tax burdens on some unitholders. As discussed above, if any such entity were a non-U.S.corporation, it might be considered a PFIC. If any such entity were a U.S. corporation, it would be subject to U.S.federal net income tax on its income, including any gain recognized on the disposition of its investments. Inaddition, if the investment were to involve U.S. real property, gain recognized on the disposition of theinvestment by a corporation generally would be subject to corporate level tax, whether the corporation were aU.S. or a non-U.S. corporation.U.S. Withholding TaxesAlthough each U.S. Holder is required to provide us with an IRS Form W-9, we nevertheless may beunable to accurately or timely determine the tax status of our investors for purposes of determining whether U.S.withholding applies to payments made by our company to some or all of our unitholders. In such a case,payments made by our company to U.S. Holders might be subject to U.S. “backup” withholding at the applicablerate (currently 28%) or other U.S. withholding taxes (potentially as high as 35%). You would be able to treat as acredit your allocable share of any U.S. withholding taxes paid in the taxable year in which such withholdingtaxes were paid and, as a result, you might be entitled to a refund of such taxes from the IRS. In the event youtransfer or otherwise dispose of some or all of your units, special rules might apply for purposes of determiningwhether you or the transferee of such units were subject to U.S. withholding taxes in respect of income allocableto, or distributions made on account of, such units or entitled to refunds of any such taxes withheld. See below“Administrative Matters—Certain Effects of a Transfer of Units”. You should consult an independent tax adviserregarding the treatment of U.S. withholding taxes.169

Transferor/Transferee AllocationsOur company may allocate items of income, gain, loss, and deduction using a monthly or otherconvention, whereby any such items recognized in a given month by our company are allocated to ourunitholders as of a specified date of such month. As a result, if you transfer your units, you might be allocatedincome, gain, loss, and deduction realized by our company after the date of the transfer. Similarly, if you acquireadditional units, you might be allocated income, gain, loss, and deduction realized by our company prior to yourownership of such units.Although Section 706 of the U.S. Internal Revenue Code generally governs allocations of items ofpartnership income and deductions between transferors and transferees of partnership interests, it is not clear thatour company’s allocation method complies with the requirements. If our company’s convention were notpermitted, the IRS might contend that our company’s taxable income or losses must be reallocated among ourunitholders. If such a contention were sustained, your tax liabilities might be adjusted to your detriment. TheBPY General Partner is authorized to revise our company’s method of allocation between transferors andtransferees (as well as among investors whose interests otherwise vary during a taxable period).U.S. Federal Estate Tax ConsequencesIf our units are included in the gross estate of a U.S. citizen or resident for U.S. federal estate taxpurposes, then a U.S. federal estate tax might be payable in connection with the death of such person. IndividualU.S. Holders should consult an independent tax adviser concerning the potential U.S. federal estate taxconsequences with respect to our units.Certain Reporting RequirementsA U.S. Holder who invests more than $100,000 in our company may be required to file IRS Form 8865reporting the investment with such U.S. Holder’s U.S. federal income tax return for the year that includes thedate of the investment. You may be subject to substantial penalties if you fail to comply with this and otherinformation reporting requirements with respect to an investment in our units. You should consult an independenttax adviser regarding such reporting requirements.U.S. Taxation of Tax-Exempt U.S. Holders of Our UnitsIncome recognized by a U.S. tax-exempt organization is exempt from U.S. federal income tax except tothe extent of the organization’s unrelated business taxable income, or UBTI. UBTI is defined generally as anygross income derived by a tax-exempt organization from an unrelated trade or business that it regularly carrieson, less the deductions directly connected with that trade or business. In addition, income arising from apartnership (or other entity treated as a partnership for U.S. federal income tax purposes) that holds operatingassets or is otherwise engaged in a trade or business generally will constitute UBTI. Notwithstanding theforegoing, UBTI generally does not include any dividend income, interest income, certain other categories ofpassive income, or capital gains realized by a tax-exempt organization, so long as such income is not “debtfinanced”,as discussed below. The BPY General Partner currently believes that our company should not beregarded as engaged in a trade or business, and anticipates that any operating assets held by our company will beheld through entities that are treated as corporations for U.S. federal income tax purposes.The exclusion from UBTI does not apply to income from “debt-financed property”, which is treated asUBTI to the extent of the percentage of such income that the average acquisition indebtedness with respect to theproperty bears to the average tax basis of the property for the taxable year. If an entity treated as a partnership forU.S. federal income tax purposes incurs acquisition indebtedness, a tax-exempt partner in such partnership willbe deemed to have acquisition indebtedness equal to its allocable portion of such acquisition indebtedness. If anysuch indebtedness were used by our company or by the Property Partnership to acquire property, such property170

generally would constitute debt-financed property, and any income or gain realized on such debt-financedproperty and allocated to a tax-exempt organization generally would constitute UBTI to such tax-exemptorganization. In addition, even if such indebtedness were not used either by our company or by the PropertyPartnership to acquire property but were instead used to fund distributions to our unitholders, if a tax-exemptorganization subject to taxation in the United States used such proceeds to make an investment outside ourcompany, the IRS might assert that such investment constitutes debt-financed property to such unitholder withthe consequences noted above. Our company and the Property Partnership do not intend to directly incur debt toacquire property, and the BPY General Partner and the Property General Partner do not believe that our companyor the Property Partnership will generate UBTI attributable to debt-financed property in the future. Moreover, theBPY General Partner and the Property General Partner intend to use commercially reasonable efforts to structurethe activities of our company and the Property Partnership, respectively, to avoid generating UBTI. However,neither our company nor the Property Partnership is prohibited from incurring indebtedness, and no assurancecan be provided that neither our company nor the Property Partnership will generate UBTI attributable to debtfinancedproperty in the future. Tax-exempt U.S. Holders should consult an independent tax adviser regardingthe tax consequences of an investment in our units.Investments by U.S. Mutual FundsU.S. mutual funds that are treated as regulated investment companies, or RICs, for U.S. federal incometax purposes are required, among other things, to meet an annual 90% gross income and a quarterly 50% assetvalue test under Section 851(b) of the U.S. Internal Revenue Code to maintain their favorable U.S. federalincome tax status. The treatment of an investment by a RIC in our units for purposes of these tests will depend onwhether our company is treated as a “qualified publicly-traded partnership”. If our company is so treated, thenour units themselves are the relevant assets for purposes of the 50% asset value test, and the net income from ourunits is the relevant gross income for purposes of the 90% gross income test. If, however, our company is not sotreated, then the relevant assets are the RIC’s allocable share of the underlying assets held by our company, andthe relevant gross income is the RIC’s allocable share of the underlying gross income earned by our company.Whether our company will qualify as a qualified publicly-traded partnership depends on the exact nature of itsfuture investments, but the BPY General Partner believes it is likely that our company will not be treated as aqualified publicly-traded partnership. RICs should consult an independent tax adviser regarding the U.S. taxconsequences of an investment in our units.Consequences to Non-U.S. HoldersSpin-OffA Non-U.S. Holder generally should not recognize gain or loss for U.S. federal income tax purposes uponthe receipt of our units pursuant to the spin-off.Holding of Units and Other ConsiderationsBased on our organizational structure following the spin-off, as well as our company’s expected incomeand assets, the BPY General Partner and the Property General Partner currently believe that our company isunlikely to earn income treated as effectively connected with a U.S. trade or business, including effectivelyconnected income attributable to the sale of a “U.S. real property interest”, as defined in the U.S. InternalRevenue Code. If, as anticipated, our company is not treated as engaged in a U.S. trade or business or as derivingincome which is treated as effectively connected with a U.S. trade or business, and provided that a Non-U.S.Holder is not itself engaged in a U.S. trade or business, then such Non-U.S. Holder generally will not be subjectto U.S. tax return filing requirements solely as a result of owning our units and generally will not be subject toU.S. federal income tax on its allocable share of our company’s interest and dividends from non-U.S.-sources orgain from the sale or other disposition of securities or real property located outside of the United States.171

However, there can be no assurance that the law will not change or that the IRS will not deem ourcompany to be engaged in a U.S. trade or business. If, contrary to the BPY General Partner’s expectations, ourcompany is treated as engaged in a U.S. trade or business, then a Non-U.S. Holder generally would be required tofile a U.S. federal income tax return, even if no effectively connected income were allocable to it. If our companywere to have income treated as effectively connected with a U.S. trade or business, then a Non-U.S. Holderwould be required to report that income and would be subject to U.S. federal income tax at the regular graduatedrates. In addition, our company might be required to withhold U.S. federal income tax on such Non-U.S.Holder’s distributive share of such income. A corporate Non-U.S. Holder might also be subject to branch profitstax at a rate of 30%, or at a lower treaty rate, if applicable. Finally, if our company were treated as engaged in aU.S. trade or business, a portion of any gain realized by a Non-U.S. Holder upon the sale or exchange of its unitscould be treated as income effectively connected with a U.S. trade or business and therefore subject to U.S.federal income tax at the regular graduated rates.In general, even if our company is not engaged in a U.S. trade or business, and assuming you are nototherwise engaged in a U.S. trade or business, you will nonetheless be subject to a withholding tax of 30% on thegross amount of certain U.S.-source income which is not effectively connected with a U.S. trade or business.Income subjected to such a flat tax rate is income of a fixed or determinable annual or periodic nature, includingdividends and certain interest income. Such withholding tax may be reduced or eliminated with respect to certaintypes of income under an applicable income tax treaty between the United States and your country of residenceor under the “portfolio interest” rules of the U.S. Internal Revenue Code, provided that you provide propercertification as to your eligibility for such treatment. Notwithstanding the foregoing, and although each Non-U.S.Holder is required to provide us with an IRS Form W-8, we nevertheless may be unable to accurately or timelydetermine the tax status of our investors for purposes of establishing whether reduced rates of withholding applyto some or all of our investors. In such a case, your allocable share of distributions of U.S.-source dividend andinterest income will be subject to U.S. withholding tax at a rate of 30%. Further, if you would not be subject toU.S. tax based on your tax status or otherwise were eligible for a reduced rate of U.S. withholding, you mightneed to take additional steps to receive a credit or refund of any excess withholding tax paid on your account,which could include the filing of a non-resident U.S. income tax return with the IRS. Among other limitationsapplicable to claiming treaty benefits, if you reside in a treaty jurisdiction which does not treat our company as apass-through entity, you might not be eligible to receive a refund or credit of excess U.S. withholding taxes paidon your account. In the event you transfer or otherwise dispose of some or all of your units, special rules mayapply for purposes of determining whether you or the transferee of such units are subject to U.S. withholdingtaxes in respect of income allocable to, or distributions made on account of, such units or entitled to refunds ofany such taxes withheld. See “—Administrative Matters—Certain Effects of a Transfer of Units” below. Youshould consult an independent tax adviser regarding the treatment of U.S. withholding taxes.Special rules may apply in the case of a Non-U.S. Holder subject to special rules, including, withoutlimitation, any Non-U.S. Holder (i) that has an office or fixed place of business in the United States; (ii) that ispresent in the United States for 183 days or more in a taxable year; or (iii) that is (a) a former citizen or long-termresident of the United States, (b) a foreign insurance company that is treated as holding a partnership interest inour company in connection with its U.S. business, (c) a PFIC, or (d) a corporation that accumulates earnings toavoid U.S. federal income tax. You should consult an independent tax adviser regarding the application of thesespecial rules.Taxes in Other JurisdictionsIn addition to U.S. federal income tax consequences, an investment in our company could subject you toU.S. state, local, and non-U.S. taxes imposed by the various jurisdictions in which our company entities dobusiness or own property now or in the future, even if you do not reside in any of those jurisdictions. You couldalso be subject to tax return filing obligations and income, franchise, or other taxes, including withholding taxes,in the jurisdictions in which we invest. Furthermore, you may be subject to penalties for failure to comply withthese requirements. Based on our organizational structure following the spin-off, as well as our company’s172

expected income and assets, the BPY General Partner and the Property General Partner currently believe that aunitholder is unlikely to incur an additional tax return filing obligation, solely as a result of owning our units,outside of the jurisdiction in which such unitholder is resident for tax purposes or otherwise is subject to tax.However, no assurance can be provided that this is currently the case or will be the case in the future. It is yourresponsibility to file all U.S. federal, state, local, and non-U.S. tax returns that may be required of you.Income or gain from investments held by our company may be subject to withholding or other taxes injurisdictions outside the United States, except to the extent an income tax treaty applies. If you wish to claim thebenefit of an applicable income tax treaty, you might be required to submit information to tax authorities in suchjurisdictions. You should consult an independent tax adviser regarding the U.S. federal, state, local, and non-U.S.tax consequences of an investment in our company.Administrative MattersTax Matters PartnerThe BPY General Partner will act as our company’s “tax matters partner”. As the tax matters partner, theBPY General Partner will have the authority, subject to certain restrictions, to act on behalf of our company inconnection with any administrative or judicial review of our company’s items of income, gain, loss, deduction, orcredit.Information ReturnsWe have agreed to use commercially reasonable efforts to furnish to you, within 90 days after the close ofeach calendar year, tax information (including IRS Schedule K-1), which describes on a U.S. Dollar basis yourshare of our company’s income, gain, loss, and deduction for our preceding taxable year. However, providing thisU.S. tax information to our unitholders will be subject to delay in the event of, among other reasons, the late receiptof any necessary tax information from lower-tier entities. It is therefore possible that, in any taxable year, you willneed to apply for an extension of time to file your tax returns. In preparing this U.S. tax information, we will usevarious accounting and reporting conventions, some of which have been mentioned in the previous discussion, todetermine your share of income, gain, loss, and deduction. The IRS may successfully contend that certain of thesereporting conventions are impermissible, which could result in an adjustment to your income or loss.Our company may be audited by the IRS. Adjustments resulting from an IRS audit could require you toadjust a prior year’s tax liability and result in an audit of your own tax return. Any audit of your tax return couldresult in adjustments not related to our tax returns, as well as those related to our tax returns.Tax Shelter Regulations and Related Reporting RequirementsIf we were to engage in a “reportable transaction”, we (and possibly our unitholders) would be required tomake a detailed disclosure of the transaction to the IRS in accordance with regulations governing tax shelters andother potentially tax-motivated transactions. A transaction may be a reportable transaction based upon any ofseveral factors, including the fact that it is a type of tax avoidance transaction publicly identified by the IRS as a“listed transaction” or “transaction of interest”, or that it produces certain kinds of losses in excess of $2 million(or, in the case of certain foreign currency transactions, losses in excess of $50,000). An investment in ourcompany may be considered a “reportable transaction” if, for example, our company were to recognize certainsignificant losses in the future. In certain circumstances, a unitholder who disposes of an interest in a transactionresulting in the recognition by such holder of significant losses in excess of certain threshold amounts may beobligated to disclose its participation in such transaction. Certain of these rules are unclear, and the scope ofreportable transactions can change retroactively. Therefore, it is possible that the rules may apply to transactionsother than significant loss transactions.173

Moreover, if we were to participate in a reportable transaction with a significant purpose to avoid orevade tax, or in any listed transaction, you might be subject to (i) significant accuracy related penalties with abroad scope, (ii) for those persons otherwise entitled to deduct interest on federal tax deficiencies,non-deductibility of interest on any resulting tax liability, and (iii) in the case of a listed transaction, an extendedstatute of limitations. We do not intend to participate in any reportable transaction with a significant purpose toavoid or evade tax, nor do we intend to participate in any listed transactions. However, no assurance can beprovided that the IRS will not assert that we have participated in such a transaction.You should consult an independent tax adviser concerning any possible disclosure obligation under theregulations governing tax shelters with respect to the disposition of our units.Taxable YearOur company currently intends to use the calendar year as its taxable year for U.S. federal income taxpurposes. Under certain circumstances which we currently believe are unlikely to apply, a taxable year other thanthe calendar year may be required for such purposes.Constructive TerminationSubject to the electing large partnership rules described below, our company will be considered to havebeen terminated for U.S. federal income tax purposes if there is a sale or exchange of 50% or more of our unitswithin a 12-month period.A constructive termination of our company would result in the close of its taxable year for all unitholders.If a unitholder reports on a taxable year other than a fiscal year ending on our company’s year-end, and theunitholder is otherwise subject to U.S. federal income tax, the closing of our company’s taxable year may resultin more than 12 months of our company’s taxable income or loss being includable in such unitholder’s taxableincome for the year of the termination. We would be required to make new tax elections after a termination,including a new Section 754 Election. A constructive termination could also result in penalties and other adversetax consequences if we were unable to determine that the termination had occurred. Moreover, a constructivetermination might either accelerate the application of, or subject our company to, any tax legislation enactedbefore the termination.Elective Procedures for Large PartnershipsThe U.S. Internal Revenue Code allows large partnerships to elect streamlined procedures for income taxreporting. This election would reduce the number of items that must be separately stated on the IRS SchedulesK-1 that are issued to our unitholders, and such IRS Schedules K-1 would have to be provided to holders on orbefore the first March 15 following the close of each taxable year. In addition, this election would prevent ourcompany from suffering a “technical termination” (which would close our company’s taxable year and requirethat we make a new Section 754 Election) if, within a 12-month period, there were a sale or exchange of 50% ormore of our total units. Despite the foregoing benefits, there are also costs and administrative burdens associatedwith such an election. Consequently, as of this time, our company has not elected to be subject to the reportingprocedures applicable to large partnerships.Withholding and Backup WithholdingFor each calendar year, we will report to you and to the IRS the amount of distributions that we pay, andthe amount of tax (if any) that we withhold on these distributions. The proper application to our company of therules for withholding under Sections 1441 through 1446 of the U.S. Internal Revenue Code (applicable to certaindividends, interest, and amounts treated as effectively connected with a U.S. trade or business, among otheritems) is unclear. Because the documentation we receive may not properly reflect the identities of unitholders at174

any particular time (in light of possible sales of our units), we may over-withhold or under-withhold with respectto a particular unitholder. For example, we may impose withholding, remit such amount to the IRS and thusreduce the amount of a distribution paid to a Non-U.S. Holder. It may be the case, however, that thecorresponding amount of our income was not properly allocable to such holder, and the appropriate amount ofwithholding should have been less than the actual amount withheld. Such Non-U.S. Holder would be entitled to acredit against the holder’s U.S. federal income tax liability for all withholding, including any such excesswithholding. However, if the withheld amount were to exceed the holder’s U.S. federal income tax liability, theholder would need to apply for a refund to obtain the benefit of such excess withholding. Similarly, we may failto withhold on a distribution, and it may be the case that the corresponding income was properly allocable to aNon-U.S. Holder and that withholding should have been imposed. In such case, we intend to pay the underwithheldamount to the IRS, and we may treat such under-withholding as an expense that will be borne by allunitholders on a pro rata basis (since we may be unable to allocate any such excess withholding tax cost to therelevant Non-U.S. Holder).Under the backup withholding rules, you may be subject to backup withholding tax (at the applicable rate,currently 28%) with respect to distributions paid unless: (i) you are an exempt recipient and demonstrate this factwhen required; or (ii) provide a taxpayer identification number, certify as to no loss of exemption from backupwithholding tax, and otherwise comply with the applicable requirements of the backup withholding tax rules. AU.S. Holder that is exempt should certify such status on a properly completed IRS Form W-9. A Non-U.S.Holder may qualify as an exempt recipient by submitting a properly completed IRS Form W-8. Backupwithholding is not an additional tax. The amount of any backup withholding from a payment to you will beallowed as a credit against your U.S. federal income tax liability and may entitle you to a refund from the IRS,provided you supply the required information to the IRS in a timely manner. If you do not timely provide ourcompany, or the applicable nominee, broker, clearing agent, or other intermediary, with IRS Form W-9 or IRSForm W-8, as applicable, or such form is not properly completed, then our company may become subject to U.S.backup withholding taxes in excess of what would have been imposed had our company or the applicableintermediary received properly completed forms from all unitholders. For administrative reasons, and in order tomaintain the fungibility of our units, such excess U.S. backup withholding taxes may be treated by our companyas an expense that will be borne indirectly by all unitholders on a pro rata basis (e.g., since it may be impracticalfor us to allocate any such excess withholding tax cost to the unitholders that failed to timely provide the properU.S. tax forms).Additional Withholding RequirementsUnder recently enacted U.S. legislation, certain payments of U.S.-source income made on or afterJanuary 1, 2014 (as well as payments attributable to dispositions of property which produce or could producecertain U.S.-source income) to our company or by our company to or through non-U.S. financial institutions ornon-U.S. entities could be subject to a 30% withholding tax unless (i) the non-U.S. financial institution entersinto an agreement with the IRS to provide to the IRS information concerning its direct and certain indirect U.S.account holders, or (ii) in the case of other non-U.S. entities, such entity provides to the withholding agentsimilar information concerning its substantial U.S. beneficial owners. Significant exceptions to theserequirements apply, but the scope of these exceptions is addressed in U.S. Treasury regulations that have yet tobe made final. You should consult an independent tax adviser regarding the treatment of U.S. withholding taxesin general and the application of the recently enacted legislation in light of your particular circumstances.Information Reporting with Respect to Foreign Financial AssetsUnder recently promulgated U.S. Treasury Regulations, U.S. individuals that own “specified foreignfinancial assets” with an aggregate fair market value exceeding either $50,000 on the last day of the taxable yearor $75,000 at any time during the taxable year generally are required to file an information report with respect tosuch assets with their tax returns. Significant penalties may apply to persons who fail to comply with these newrules. Specified foreign financial assets include not only financial accounts maintained in foreign financial175

institutions, but also, unless held in accounts maintained by a financial institution, any stock or security issued bya non-U.S. person, any financial instrument or contract held for investment that has an issuer or counterpartyother than a U.S. person, and any interest in a foreign entity. The U.S. Treasury Department and the IRSanticipate that, for taxable years beginning on or after January 1, 2012, these information reporting requirementswill apply to certain U.S. entities that own specified foreign financial assets. The failure to report informationrequired under these regulations could result in substantial penalties and in the extension of the statute oflimitations with respect to federal income tax returns filed by you. You should consult an independent tax adviserregarding the possible implications of these recently promulgated regulations for an investment in our units.Certain Effects of a Transfer of UnitsOur company may allocate items of income, gain, loss, deduction, and credit using a monthly or otherconvention, whereby any such items recognized in a given month by our company are allocated to ourunitholders as of a specified date of such month. Any U.S. withholding taxes applicable to dividends received bythe Property Partnership (and, in turn, our company) generally will be withheld by our company only when suchdividends are paid. Because our company generally intends to distribute amounts received in respect of dividendsshortly after receipt of such amounts, it is generally expected that any U.S. withholding taxes withheld by ourcompany on such amounts will correspond to our unitholders who were allocated income and who received thedistributions in respect of such amounts. The Property Partnership may invest in debt obligations or othersecurities for which the accrual of interest or income thereon is not matched by a contemporaneous receipt ofcash. Any such accrued interest or other income would be allocated pursuant to such monthly or otherconvention. Consequently, our unitholders may recognize income in excess of cash distributions received fromour company, and any income so included by a unitholder would increase the basis such unitholder has in ourunits and would offset any gain (or increase the amount of loss) realized by such unitholder on a subsequentdisposition of its units. In addition, U.S. withholding taxes generally would be withheld by our company only onthe payment of cash in respect of such accrued interest or other income, and, therefore, it is possible that someunitholders would be allocated income which might be distributed to a subsequent unitholder, and suchsubsequent unitholder would be subject to withholding at the time of distribution. As a result, the subsequentunitholder, and not the unitholder who was allocated income, would be entitled to claim any available credit withrespect to such withholding.The Property Partnership has invested and will continue to invest in certain Holding Entities andoperating entities organized in non-U.S. jurisdictions, and income and gain from such investments may besubject to withholding and other taxes in such jurisdictions. If any such non-U.S. taxes were imposed on incomeallocable to a U.S. Holder, and such holder were thereafter to dispose of its units prior to the date distributionswere made in respect of such income, under applicable provisions of the U.S. Internal Revenue Code and U.S.Treasury regulations, the unitholder to whom such income was allocated (and not the unitholder to whomdistributions were ultimately made) would, subject to other applicable limitations, be the party permitted to claima credit for such non-U.S. taxes for U.S. federal income tax purposes. Thus a unitholder may be affected eitherfavorably or adversely by the foregoing rules. Complex rules may, depending on a unitholder’s particularcircumstances, limit the availability or use of foreign tax credits, and you are urged to consult an independent taxadviser regarding all aspects of foreign tax credits.Nominee Reportingus:Persons who hold an interest in our company as a nominee for another person are required to furnish to(a)(b)the name, address and taxpayer identification number of the beneficial owner and the nominee;whether the beneficial owner is (1) a person that is not a U.S. person, (2) a foreign government, aninternational organization, or any wholly owned agency or instrumentality of either of theforegoing, or (3) a tax-exempt entity;176

(c)(d)the amount and description of units held, acquired, or transferred for the beneficial owner; andspecific information including the dates of acquisitions and transfers, means of acquisitions andtransfers, and acquisition cost for purchases, as well as the amount of net proceeds from sales.Brokers and financial institutions are required to furnish additional information, including whether theyare U.S. persons and specific information on our units they acquire, hold, or transfer for their own account. Apenalty of $100 per failure, up to a maximum of $1,500,000 per calendar year, generally is imposed by the U.S.Internal Revenue Code for the failure to report such information to us. The nominee is required to supply thebeneficial owner of our units with the information furnished to us.New Legislation or Administrative or Judicial ActionThe U.S. federal income tax treatment of our unitholders depends, in some instances, on determinations offact and interpretations of complex provisions of U.S. federal income tax law for which no clear precedent orauthority may be available. You should be aware that the U.S. federal income tax rules, particularly those applicableto partnerships, are constantly under review (including currently) by the Congressional tax-writing committees andother persons involved in the legislative process, the IRS, the U.S. Treasury Department and the courts, frequentlyresulting in revised interpretations of established concepts, statutory changes, revisions to regulations and othermodifications and interpretations, any of which could adversely affect the value of our units and be effective on aretroactive basis. For example, changes to the U.S. federal tax laws and interpretations thereof could make it moredifficult or impossible for our company to be treated as a partnership that is not taxable as a corporation for U.S.federal income tax purposes, affect the tax considerations of owning our units, change the character or treatment ofportions of our company’s income (including, for example, the treatment of carried interest as ordinary incomerather than capital gain), and adversely affect an investment in our units. Such changes could also affect or cause ourcompany to change the way it conducts its activities, affect the tax considerations of an investment in our company,and otherwise change the character or treatment of portions of our company’s income (including changes thatrecharacterize certain allocations as potentially non-deductible fees).Our company’s organizational documents and agreements permit the BPY General Partner to modify ourlimited partnership agreement from time to time, without the consent of our unitholders, to elect to treat ourcompany as a corporation for U.S. federal tax purposes, or to address certain changes in U.S. federal income taxregulations, legislation or interpretation. In some circumstances, such revisions could have a material adverseimpact on some or all of our unitholders.THE FOREGOING DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFULTAX PLANNING. THE TAX MATTERS RELATING TO OUR COMPANY AND UNITHOLDERS ARECOMPLEX AND ARE SUBJECT TO VARYING INTERPRETATIONS. MOREOVER, THE EFFECTOF EXISTING INCOME TAX LAWS, THE MEANING AND IMPACT OF WHICH IS UNCERTAIN,AND OF PROPOSED CHANGES IN INCOME TAX LAWS WILL VARY WITH THE PARTICULARCIRCUMSTANCES OF EACH UNITHOLDER, AND IN REVIEWING THIS REGISTRATIONSTATEMENT THESE MATTERS SHOULD BE CONSIDERED. EACH UNITHOLDER SHOULDCONSULT AN INDEPENDENT TAX ADVISER WITH RESPECT TO THE U.S. FEDERAL, STATE,LOCAL, AND OTHER TAX CONSEQUENCES OF ANY INVESTMENT IN OUR UNITS.Canadian Federal Income Tax ConsiderationsThe following is a summary of the principal Canadian federal income tax consequences under the TaxAct of the receipt, holding and disposition of units in our company generally applicable to a holder who receivesunits in our company pursuant to the spin-off and who, for purposes of the Tax Act and at all relevant times,holds our units as capital property, deals at arm’s length with and is not affiliated with our company, the PropertyPartnership, the BPY General Partner, the Property General Partner, the Property GP LP and their respective177

affiliates. Generally, our units will be considered to be capital property to a holder, provided that the holder doesnot use or hold our units in the course of carrying on a business of trading or dealing in securities and has notacquired them in one or more transactions considered to be an adventure or concern in the nature of trade.This summary is not applicable to (i) a holder that is a “financial institution” as defined in the Tax Act forpurposes of the “mark-to-market” rules, (ii) a holder that is a “specified financial institution” as defined in theTax Act, (iii) a holder who makes or has made a functional currency reporting election pursuant to section 261 ofthe Tax Act, (iv) a holder an interest in which would be a “tax shelter investment” as defined in the Tax Act (andthis summary assumes that no such persons hold our units), (v) a holder who has, directly or indirectly, a“significant interest” as defined in subsection 34.2(1) of the Tax Act in our company, or (vi) a holder to whomany affiliate of our company is a “foreign affiliate” for purposes of the Tax Act. Any such holders should consulttheir own tax advisors with respect to an investment in our units.This summary is based on the current provisions of the Tax Act, the regulations thereunder, or theRegulations, all specific proposals to amend the Tax Act or the Regulations publicly announced by or on behalfof the Minister prior to the date hereof, or the Tax Proposals, and the current published administrative andassessing policies and practices of the CRA. This summary assumes that all Tax Proposals will be enacted in theform proposed but no assurance can be given that the Tax Proposals will be enacted in the form proposed or atall. This summary does not otherwise take into account or anticipate any changes in law, whether by judicial,administrative or legislative decision or action or changes in CRA’s administrative and assessing policies andpractices, nor does it take into account provincial, territorial or foreign income tax legislation or considerations,which may differ from those described herein. This summary is not exhaustive of all possible Canadian federalincome tax consequences that may affect holders and prospective holders.This summary assumes that neither our company nor the Property Partnership will be considered to carryon business in Canada. Our Managing General Partner and the Property General Partner have advised that theyintend to organize and conduct the affairs of each of these entities, to the extent possible, so that neither of theseentities should be considered to carry on business in Canada for purposes of the Tax Act. However, no assurancecan be given in this regard.This summary also assumes that neither our company nor the Property Partnership is a “tax shelter” or“tax shelter investment”, each as defined in the Tax Act. However, no assurance can be given in this regard.This summary also assumes that neither our company nor the Property Partnership will be a “SIFTpartnership” as defined in subsection 197(1) of the Tax Act at any relevant time for purposes of the SIFT Ruleson the basis that neither our company nor the Property Partnership will be a “Canadian resident partnership” asdefined in subsection 248(1) of the Tax Act at any relevant time. However, there can be no assurance that theSIFT Rules will not be revised or amended such that the SIFT Rules will apply.This summary is of a general nature only and is not intended to be, nor should it be construed to be,legal or tax advice to any particular holder of our units, and no representation with respect to theCanadian federal income tax consequences to any particular holder is made. Consequently, holders of ourunits and prospective holders of our units are advised to consult their own tax advisors with respect totheir particular circumstances. See also “Risk Factors- Risks Relating to Taxation.”For purposes of the Tax Act, all amounts relating to the acquisition, holding or disposition of our unitsmust be expressed in Canadian Dollars including any distributions, adjusted cost base and proceeds ofdisposition. For purposes of the Tax Act, amounts denominated in a currency other than the Canadian Dollargenerally must be converted into Canadian Dollars using the rate of exchange quoted by the Bank of Canada atnoon on the date such amounts arose, or such other rate of exchange as is acceptable to the CRA.178

Taxation of Canadian Resident Limited PartnersThe following is a discussion of the consequences under the Tax Act to a unitholder who, for purposes ofthe Tax Act and at all relevant times, is resident or deemed to be resident in Canada, or Canadian LimitedPartners.Spin-OffCanadian Limited Partners who received units of our company under the spin-off will be considered tohave received a taxable dividend equal to the fair market value of our units so received plus the amount of anycash received in lieu of fractional units. The adjusted cost base to a Canadian Limited Partner of our unitsreceived upon the spin-off will be equal to the fair market value of our units so received. In computing theadjusted cost base of our units at any time, the adjusted cost base of a Canadian Limited Partner’s units will beaveraged with the adjusted cost base of all of our other units, if any, held by the Canadian Limited Partner ascapital property at the particular time.Such dividend received by a shareholder who is an individual will be included in computing the holder’sincome subject to the gross-up and dividend tax credit rules normally applicable under the Tax Act to taxabledividends received from taxable Canadian corporations. The dividend will be eligible for the enhanced gross-upand dividend tax credit if Brookfield Asset Management designates the dividend as an “eligible dividend”. Theremay be limitations on Brookfield Asset Management’s ability to designate dividends as eligible dividends. Suchdividend received by an individual, or certain trusts, may give rise to alternative minimum tax under the Tax Act,depending on the individual’s circumstances.Such dividend received by a holder that is a corporation will be included in the corporation’s income andwill generally be deductible in computing its taxable income. Certain corporations, including “privatecorporations” or “subject corporations” (as such terms are defined in the Tax Act) may be liable to pay arefundable tax under Part IV of the Tax Act at the rate of 33 1/3% on the dividend to the extent that the dividendis deductible in computing taxable income.Subsection 55(2) of the Tax Act provides that where a corporate holder receives a dividend and suchdividend is deductible in computing the holder’s income and is not subject to Part IV tax or is subject to Part IVtax that is refundable as part of the series of transactions that includes the receipt of the dividend, all or part ofthe dividend may in certain circumstances be treated as a capital gain from the disposition of a capital propertythe taxable portion of which must be included in computing the holder’s income for the year in which thedividend was received. Accordingly, corporate holders should consult their own tax advisors for specific advicewith respect to the potential application of this provision.Computation of Income or LossEach Canadian Limited Partner is required to include (or, subject to the “at-risk rules” discussed below,entitled to deduct) in computing his or her income for a particular taxation year the Canadian Limited Partner’spro rata share of the income (or loss) of our company for its fiscal year ending in, or coincidentally with, theCanadian Limited Partner’s taxation year end, whether or not any of that income is distributed to the CanadianLimited Partner in the taxation year and regardless of whether our units were held throughout such year.Our company will not itself be a taxable entity and is not expected to be required to file an income taxreturn in Canada. However, the income (or loss) of our company for a fiscal period for purposes of the Tax Actwill be computed as if it were a separate person resident in Canada and the unitholders will be allocated a shareof that income (or loss) in accordance with our limited partnership agreement. The income (or loss) of ourcompany will include our company’s share of the income (or loss) of the Property Partnership for a fiscal yeardetermined in accordance with the Property Partnership’s limited partnership agreement. For this purpose, ourcompany’s fiscal year end and that of the Property Partnership will be December 31.179

The income for tax purposes of our company for a given fiscal year of our company will be allocated toeach Canadian Limited Partner in an amount calculated by multiplying such income that is allocable tounitholders by a fraction, the numerator of which is the sum of the distributions received by such CanadianLimited Partner with respect to such fiscal year and the denominator of which is the aggregate amount of thedistributions made by our company to all unitholders with respect to such fiscal year. Generally, the source andcharacter of items of income allocated to Canadian Limited Partner with respect to a fiscal year of our companywill be the same source and character as the cash distributions received by such Canadian Limited Partner withrespect to such fiscal year.If, with respect to a given fiscal year, no distribution is made by us to our unitholders or our company hasa loss for tax purposes, one quarter of the income, or loss, as the case may be, for tax purposes of our companyfor such fiscal year that is allocable to unitholders, will be allocated to our unitholders of record at the end ofeach calendar quarter ending in such fiscal year in the proportion that the number of our units held at each suchdate by a unitholder is of the total number of units of our company that are issued and outstanding at each suchdate. Generally, the source and character of such income or loss allocated to a unitholder at the end of the eachcalendar quarter will be the same source and character as the income or loss earned or incurred by our companyin such calendar quarter.The income of our company as determined for purposes of the Tax Act may differ from its income asdetermined for accounting purposes and may not be matched by cash distributions. In addition, for purposes ofthe Tax Act, all income (or losses) of our company and the Property Partnership must be calculated in Canadiancurrency. Where our company (or the Property Partnership) holds investments denominated in U.S. Dollars orother foreign currencies, gains and losses may be realized by our company as a consequence of fluctuations in therelative values of the Canadian and foreign currencies.In computing the income (or loss) of our company, deductions may be claimed in respect of reasonableadministrative costs, interest and other expenses incurred by us for the purpose of earning income, subject to therelevant provisions of the Tax Act. Our company may also deduct from its income for the year a portion of thereasonable expenses, if any, incurred by our company to issue our units. The portion of such issue expensesdeductible by our company in a taxation year is 20% of such issue expenses, pro-rated where our company’staxation year is less than 365 days. Our company and the Property Partnership may be required to withhold andremit Canadian federal withholding tax on any management or administration fees or charges paid or credited toa non-resident person, to the extent that such management or administration fees or charges are deductible incomputing our company’s or the Property Partnership’s income from a source in Canada.In general, a Canadian Limited Partner’s share of any income (or loss) from our company from aparticular source will be treated as if it were income (or loss) of the Canadian Limited Partner from that source,and any provisions of the Tax Act applicable to that type of income (or loss) will apply to the Canadian LimitedPartner. Our company will invest in limited partnership units of the Property Partnership. In computing ourcompany’s income (or loss) under the Tax Act, the Property Partnership will itself be deemed to be a separateperson resident in Canada which computes its income (or loss) and allocates to its partners their respective shareof such income (or loss). Accordingly, the source and character of amounts included in (or deducted from) theincome of Canadian Limited Partners on account of income (or loss) earned by the Property Partnershipgenerally will be determined by reference to the source and character of such amounts when earned by theProperty Partnership.The characterization by CRA of gains realized by our company or the Property Partnership on thedisposition of investments as either capital gains or income gains will depend largely on factual considerations,and no conclusions are expressed herein.A Canadian Limited Partner’s share of taxable dividends received or considered to be received by ourcompany in a fiscal year from a corporation resident in Canada will be treated as a dividend received by the180

Canadian Limited Partner and will be subject to the normal rules in the Tax Act applicable to such dividends,including the enhanced dividend gross-up and tax credit for “eligible dividends” as defined in the Tax Act whenthe dividend received by the Property Partnership is designated as an “eligible dividend”.Foreign taxes paid by our company or the Property Partnership and taxes withheld at source (other thanfor the account of a particular unitholder) will be allocated pursuant to the governing partnership agreement.Each Canadian Limited Partner’s share of the “business-income tax” and “non-business-income tax” paid in aforeign country for a year will be creditable against its Canadian federal income tax liability to the extentpermitted by the detailed rules contained in the Tax Act. Although the foreign tax credit provisions are designedto avoid double taxation, the maximum credit is limited. Because of this, and because of timing differences inrecognition of expenses and income and other factors, there is a risk of double taxation. The Minister announcedthe Foreign Tax Credit Generator Proposals on March 4, 2010 which are contained in draft legislation releasedon August 27, 2010, to address certain foreign tax credit generator transactions. Under the Foreign Tax CreditGenerator Proposals, the foreign “business income tax” or “non-business-income tax” for any taxation year maybe limited in certain circumstances, including where a Canadian Limited Partner’s share of our company’sincome under the income tax laws of any country (other than Canada) under whose laws the income of ourcompany is subject to income taxation, is less than the Canadian Limited Partner’s share of such income forpurposes of the Tax Act. No assurances can be given that the Foreign Tax Credit Generator Proposals will notapply to any Canadian Limited Partner. If the Foreign Tax Credit Generator Proposals apply, a Canadian LimitedPartner’s foreign tax credits will be limited.Our company and the Property Partnership will be deemed to be a non-resident person in respect ofcertain amounts paid or credited to them by a person resident or deemed to be resident in Canada, includingdividends or interest. Dividends or interest (other than interest exempt from Canadian federal withholding tax)paid by a person resident or deemed to be resident in Canada to the Property Partnership will be subject towithholding tax under Part XIII of the Tax Act at the rate of 25%. However, CRA’s administrative practice insimilar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to becomputed by looking through the partnership and taking into account the residency of the partners (includingpartners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that anynon-resident partners may be entitled to under an applicable income tax treaty or convention, provided that theresidency status and entitlement to the treaty benefits can be established. In determining the rate of Canadianfederal withholding tax applicable to amounts paid by the Holding Entities to the Property Partnership, the BPYGeneral Partner and the Property General Partner expect that the Holding Entities to look-through the PropertyPartnership and our company to the residency of the partners of our company (including partners who areresidents of Canada) and to take into account any reduced rates of Canadian federal withholding tax thatnon-resident partners may be entitled to under an applicable income tax treaty or convention in order todetermine the appropriate amount of Canadian federal withholding tax to withhold from dividends or interestpaid to the Property Partnership. However, there can be no assurance that CRA would apply its administrativepractice in this context. Under the Treaty, a Canadian resident payer is required in certain circumstances to lookthroughfiscally transparent partnerships, such as our company and the Property Partnership, to the residency andtreaty entitlements of their partners and take into account reduced rates of Canadian federal withholding tax thatsuch partners may be entitled to under the Treaty.If our company incurs losses for tax purposes, each Canadian Limited Partner will, subject to the REOPProposals discussed below, be entitled to deduct in the computation of income for tax purposes the CanadianLimited Partner’s pro rata share of any net losses for tax purposes of our company for its fiscal year to the extentthat the Canadian Limited Partner’s investment is “at-risk” within the meaning of the Tax Act. The Tax Actcontains “at-risk rules” which may, in certain circumstances, restrict the deduction of a limited partner’s share ofany losses of a limited partnership. The BPY General Partner and the Property General Partner do not anticipatethat our company or the Property Partnership will incur losses but no assurance can be given in this regard.Accordingly, Canadian Limited Partners should consult their own tax advisors for specific advice with respect tothe potential application of the “at-risk rules”.181

On October 31, 2003, the Department of Finance released for public comment Tax Proposals under which ataxpayer would be considered to have a loss from a source that is a business or property for a taxation year only if,in that year, it is reasonable to assume that the taxpayer will realize a cumulative profit (excluding capital gains orlosses) from the business or property during the period that the business is carried on or that the property is held. Ingeneral, these Tax Proposals, or the REOP Proposals, may deny the realization of losses by Canadian LimitedPartners from their investment in our company in a particular taxation year, if, in the year the loss is claimed, it isnot reasonable to expect that an overall cumulative profit would be earned from the investment in our company forthe period in which the Canadian Limited Partner has held and can reasonably be expected to hold the investment.The BPY General Partner and the Property General Partner do not anticipate that the activities of our company andthe Property Partnership will, in and of themselves, generate losses, but no assurance can be given in this regard.However, Canadian Limited Partners may incur expenses in connection with an acquisition of units in our companythat could result in a loss that could be affected by the REOP Proposals. As part of the 2005 federal budget, theMinister announced that an alternative proposal to reflect the REOP Proposals would be released for comment at anearly opportunity. No such alternative proposal has been released to date. There can be no assurance that suchalternative proposal will not adversely affect Canadian Limited Partners, or that any revised proposal may not differsignificantly from the REOP Proposals described herein.On March 4, 2010, the Minister announced as part of the 2010 Canadian federal budget that theoutstanding Tax Proposals regarding investments in “foreign investment entities”, referred to as the FIEProposals, would be replaced with revised Tax Proposals under which the existing rules in section 94.1 of theTax Act relating to investments in “offshore investment fund property” would remain in place subject to certainlimited enhancements. The Minister released draft legislation to implement the revised Tax Proposals onAugust 27, 2010. Existing section 94.1 of the Tax Act contains rules relating to investments in non-residententities that could, in certain circumstances, cause income to be imputed to Canadian Limited Partners, eitherdirectly or by way of allocation of such income imputed to our company or the Property Partnership. These ruleswould apply if it is reasonable to conclude, having regard to all the circumstances, that one of the main reasonsfor the Canadian Limited Partner, our company or the Property Partnership acquiring or holding an investment ina non-resident entity is to derive a benefit from “portfolio investments” in such a manner that taxes under the TaxAct on income, profits and gains for any year are significantly less than they would have been if such income,profits and gains had been earned directly. In determining whether this is the case, existing section 94.1 of theTax Act provides that consideration must be given to, among other factors, the extent to which the income,profits and gains for any fiscal period are distributed in that or the immediately following fiscal period. Noassurance can be given that existing section 94.1 of the Tax Act as proposed to be amended will not apply to aCanadian Limited Partner, our company or the Property Partnership. If these rules apply to a Canadian LimitedPartner, our company or the Property Partnership, income will be imputed directly to the Canadian LimitedPartner or to our company or to the Property Partnership and allocated to the Canadian Limited Partner inaccordance with the rules in existing section 94.1 of the Tax Act as proposed to be amended. The rules inexisting section 94.1 of the Tax Act as proposed to be amended are complex and Canadian Limited Partnersshould consult their own tax advisors regarding the application of these rules to them in their particularcircumstances.Dividends paid by the CFAs to the Property Partnership will be included in computing the income of theProperty Partnership. To the extent that any of the CFAs or any direct or indirect subsidiary that itself is acontrolled foreign affiliate of the Property Partnership, or Indirect CFA, thereof earns income that ischaracterized as FAPI, in a particular taxation year of the CFA or Indirect CFA, the FAPI allocable to theProperty Partnership must be included in computing the income of the Property Partnership for Canadian federalincome tax purposes for the fiscal period of the Property Partnership in which the taxation year of that CFA orIndirect CFA ends, whether or not the Property Partnership actually receives a distribution of that FAPI. If anamount of FAPI is included in computing the income of the Property Partnership for Canadian federal income taxpurposes, an amount may be deductible in respect of the “foreign accrual tax” as defined in the Tax Actapplicable to the FAPI. Any amount of FAPI included in income net of the amount of any deduction in respect of“foreign accrual tax” will increase the adjusted cost base to the Property Partnership of its shares of the particular182

CFA in respect of which the FAPI was included. At such time as the Property Partnership receives a dividend ofthis type of income that was previously treated as FAPI, that dividend will effectively not be taxable to theProperty Partnership and there will be a corresponding reduction in the adjusted cost base to the PropertyPartnership of the particular CFA shares. Under the Foreign Tax Credit Generator Proposals, the “foreign accrualtax” applicable to a particular amount of FAPI included in a partnership’s income in respect of a particular“foreign affiliate” of the partnership may be limited in certain specified circumstances, including where the shareof the income of any member of the partnership that is a person resident in Canada is, under the income tax lawsof any country (other than Canada) under whose laws the income of the partnership is subject to income taxation,less than its share thereof for purposes of the Tax Act. No assurances can be given that the Foreign Tax CreditGenerator Proposals will not apply to the Property Partnership. If the Foreign Tax Credit Generator Proposalsapply, the “foreign accrual tax” applicable to a particular amount of FAPI included in the Property Partnership’sincome in respect of a particular “foreign affiliate” of the Property Partnership will be limited.Disposition of Our UnitsThe disposition by a Canadian Limited Partner of a unit of our company will result in the realization of acapital gain (or capital loss) by such limited partner. The amount of such capital gain (or capital loss) willgenerally be the amount, if any, by which the proceeds of disposition of a unit, less any reasonable costs ofdisposition, exceed (or are exceeded by) the adjusted cost base of such unit. In general, the adjusted cost base of aCanadian Limited Partner’s units of our company will be equal to (i) the actual cost of the units (excluding anyportion thereof financed with limited recourse indebtedness) whether acquired pursuant to the spin-off, thedistribution reinvestment plan or otherwise, plus (ii) the pro rata share of the income of our company allocated tothe Canadian Limited Partner for the fiscal years of our company ending before the relevant time less (iii) theaggregate of the pro rata share of losses of our company allocated to the Canadian Limited Partner (other thanlosses which cannot be deducted because they exceed the Canadian Limited Partner’s “at-risk” amount) for thefiscal years of our company ending before the relevant time and the Canadian Limited Partner’s distributionsfrom our company made before the relevant time. The adjusted cost base of each of our units will be subject tothe averaging provisions contained in the Tax Act.Where a Canadian Limited Partner disposes of all of its units of our company, such person will no longerbe a partner of our partnership. If, however, a Canadian Limited Partner is entitled to receive a distribution fromour company after the disposition of all such units, then the Canadian Limited Partner will be deemed to disposeof the units at the later of: (i) the end of the fiscal year of our company during which the disposition occurred;and (ii) the date of the last distribution made by our company to which the Canadian Limited Partner wasentitled. Pursuant to the Tax Proposals, the pro rata share of the income (or loss) for tax purposes of ourcompany for a particular fiscal year which is allocated to a Canadian Limited Partner who has ceased to be apartner will generally be added (or deducted) in the computation of the adjusted cost base of the CanadianLimited Partner’s units immediately prior to the time of the disposition. These rules are complex and CanadianLimited Partners should consult their own tax advisors for advice with respect to the specific tax consequences tothem of disposing of units of our company.A Canadian Limited Partner will realize a deemed capital gain if, and to the extent that, the adjusted costbase of the Canadian Limited Partner’s units of our company is negative at the end of any of our fiscal years. Insuch a case, the adjusted cost base of the Canadian Limited Partner’s units of our company will be nil at thebeginning of our next fiscal year.Capital Gains and Capital LossesIn general, one-half of a capital gain realized by a Canadian Limited Partner must be included incomputing such Canadian Limited Partner’s income as a taxable capital gain. One-half of a capital loss isdeducted as an allowable capital loss against taxable capital gains realized in the year and any remainder may bededucted against taxable capital gains in any of the three years preceding the year or any year following the yearto the extent and under the circumstances described in the Tax Act.183

Where a Canadian Limited Partner disposes of units to a tax-exempt person, more than one-half of suchcapital gain may be treated as a taxable capital gain if any portion of the gain is attributable to an increase invalue of depreciable property held by the Property Partnership. Canadian Limited Partners contemplating suchdispositions should consult their own advisors. The Property General Partner does not expect that the PropertyPartnership will hold any depreciable property and therefore expects that only one-half of any capital gainsarising from a disposition of our units should be treated as taxable capital gains.A Canadian Limited Partner that is throughout the relevant taxation year a “Canadian-controlled privatecorporation” as defined in the Tax Act may be liable to pay an additional refundable tax of 6 2/3% on its“aggregate investment income”, as defined in the Tax Act, for the year, which is defined to include taxablecapital gains. Canadian Limited Partners that are individuals or trusts may be subject to the alternative minimumtax rules. Such Canadian Limited Partners should consult their own tax advisors.Eligibility for InvestmentProvided that our units are listed on a “designated stock exchange” (which currently includes the NYSEand the TSX), our units will be “qualified investments” under the Tax Act for a trust governed by a RRSP,deferred profit share plan, RRIF, registered education saving plan, registered disability saving plan, and a TFSA.Taxes may be imposed in respect of the acquisition or holding of non-qualified investments by such registeredplans and certain other taxpayers and with respect to the acquisition or holding of “prohibited investments” asdefined in the Tax Act by a RRSP, RRIF or TFSA.Our units will not be a “prohibited investment” for a trust governed by a RRSP, RRIF or TFSA, providedthat the holder of the TFSA or the annuitant of the RRSP or RRIF, as the case may be, deals at arm’s length withour company for purposes of the Tax Act and does not have a “significant interest”, as defined in the Tax Act forpurposes of the prohibited investment rules, in our company or in a corporation, partnership or trust with whichour company does not deal at arm’s length for purposes of the Tax Act. Canadian Limited Partners who holdtheir units in a RRSP, RRIF or TFSA should consult their own tax advisors to ensure that our units will not be“prohibited investments” in their particular circumstances.Taxation of Non-Canadian Limited PartnersThe following summary applies to a holder who, for purposes of the Tax Act, at all relevant times, is not,and is not deemed to be resident in Canada and who does not use or hold their investment in our company inconnection with a business carried on, or deemed to be carried on, in Canada, or a Non-Canadian Limited Partner.The following summary assumes that (i) our units are not and will not be “taxable Canadian property” ofany Non-Canadian Limited Partner at any relevant time, and (ii) our company and the Property Partnership willnot dispose of properties that are “taxable Canadian property”. “Taxable Canadian property” includes, but is notlimited to, property that is used or held in a business carried on in Canada and shares of corporations resident inCanada that are not listed on a “designated stock exchange” if more than 50% of the fair market value of theshares is derived from certain Canadian properties during the 60-month period immediately preceding thedisposition. In general, our units will not constitute “taxable Canadian property” of any Non-Canadian LimitedPartner at the time of disposition, unless (a) at any time during the 60-month period immediately preceding thedisposition, more than 50% of the fair market value of our units was derived, directly or indirectly (under TaxProposals released on August 27, 2010, excluding through a corporation, partnership or trust, the shares orinterest in which were not themselves “taxable Canadian property”), from one or any combination of: (i) real orimmovable property situated in Canada; (ii) “Canadian resource property”; (iii) “timber resource property”; and(iv) options in respect of, or interests in, or for civil law rights in, such property, whether or not such propertyexists, or (b) our units are otherwise deemed to be “taxable Canadian property”. Since our company’s assets willconsist principally of units of the Property Partnership, our units would generally be “taxable Canadian property”at a particular time if the units of the Property Partnership held by our company derived, directly or indirectly184

(under Tax Proposals released on August 27, 2010, excluding through a corporation, partnership or trust, theshares or interest in which were not themselves “taxable Canadian property”) more than 50% of their fair marketvalue from properties described in (i) to (iv) above, at any time in the 60-month period preceding the particulartime. The BPY General Partner and the Property General Partner do not expect our units to be “taxable Canadianproperty” at any relevant time and do not expect our company or the Property Partnership to dispose of “taxableCanadian property”. However, no assurance can be given in this regard.Special rules, which are not discussed in this summary, may apply to a Non-Canadian Limited Partnerthat is an insurer carrying on business in Canada and elsewhere.Spin-OffNon-Canadian Limited Partners who received our units under the spin-off will be considered to havereceived a taxable dividend equal to the fair market value of our units so received plus the amount of any cashreceived in lieu of fractional units. The dividend will be subject to Canadian federal withholding tax under PartXIII of the Tax Act at the rate of 25% of the amount of the dividend, subject to reduction under the terms of anapplicable income tax treaty or convention. To satisfy this withholding tax liability, Brookfield AssetManagement will withhold a portion of our units otherwise distributable and will withhold a portion of any cashdistribution in lieu of fractional units otherwise distributable the aggregate value of which will be equal to theCanadian federal withholding taxes applicable to the taxable dividend. Subject to receipt of any applicableregulatory approval, Brookfield Asset Management will purchase withheld units at a price equal to the fairmarket value of our units based on the five day volume- weighted average of the trading price of our unitsfollowing closing of the spin-off and will remit the proceeds of this sale together with the amount of any cashwithheld from any cash distribution in lieu of fractional units in satisfaction of the Canadian federal withholdingtax liability. Where the rate at which tax is withheld with respect to a Non-Canadian Limited Partner’s taxabledividend exceeds the rate that is applicable after giving effect to the terms of any relevant income tax treaty orconvention, a refund or credit may be claimed by the Non-Canadian Limited Partner. The adjusted cost base to aNon-Canadian Limited Partner of the units received upon the spin-off will be equal to the fair market value of theunits so received. In computing the adjusted cost base of our units at any time, the adjusted cost base of aNon-Canadian Limited Partner’s units will be averaged with the adjusted cost base of all of our other units, ifany, held by the Non-Canadian Limited Partner as capital property at the particular time.Taxation of Income or LossA Non-Canadian Limited Partner will not be subject to Canadian federal income tax under Part I of theTax Act on its share of income from a business carried on by our company (or the Property Partnership) outsideCanada or the non-business income earned by our company (or the Property Partnership) from sources inCanada. However, a Non-Canadian Limited Partner may be subject to Canadian federal withholding tax underPart XIII of the Tax Act, as described below. The BPY General Partner and the Property General Partner, as thecase may be, intend to organize and conduct the affairs of our company and the Property Partnership such thatNon-Canadian Limited Partners should not be considered to be carrying on business in Canada solely by virtue ofholding our units. However, no assurance can be given in this regard.Our company and the Property Partnership will be deemed to be a non-resident person in respect ofcertain amounts paid or credited to them by a person resident or deemed to be resident in Canada, includingdividends or interest. Dividends or interest (other than interest exempt from Canadian federal withholding tax)paid by a person resident or deemed to be resident in Canada to the Property Partnership will be subject towithholding tax under Part XIII of the Tax Act at the rate of 25%. However, CRA’s administrative practice insimilar circumstances is to permit the rate of Canadian federal withholding tax applicable to such payments to becomputed by looking through the partnership and taking into account the residency of the partners (includingpartners who are resident in Canada) and any reduced rates of Canadian federal withholding tax that anynon-resident partners may be entitled to under an applicable income tax treaty or convention, provided that the185

esidency status and entitlement to the treaty benefits can be established. In determining the rate of Canadianfederal withholding tax applicable to amounts paid by Holding Entities to the Property Partnership, the BPYGeneral Partner and the Property General Partner expect the Holding Entities to look-through the PropertyPartnership and our company to the residency of the partners of our company (including partners who areresidents of Canada) and to take into account any reduced rates of Canadian federal withholding tax thatNon-Canadian Limited Partners may be entitled to under an applicable income tax treaty or convention in orderto determine the appropriate amount of Canadian federal withholding tax to withhold from dividends or interestpaid to the Property Partnership. However, there can be no assurance that the CRA would apply its administrativepractice in this context. Under the Treaty, a Canadian resident payer is required in certain circumstances to lookthoughfiscally transparent partnerships, such as our company and the Property Partnership, to the residency andtreaty entitlements of their partners and take into account the reduced rates of Canadian federal withholding taxthat such partners may be entitled to under the Treaty.Bermuda Tax ConsiderationsIn Bermuda there are no taxes on profits, income or dividends, nor is there any capital gains tax, estateduty or death duty. Profits can be accumulated and it is not obligatory to pay dividends. As “exemptedundertakings”, exempted partnerships and overseas partnerships are entitled to apply for (and will ordinarilyreceive) an assurance pursuant to the Exempted Undertakings Tax Protection Act 1966 that, in the event thatlegislation introducing taxes computed on profits or income, or computed on any capital asset, gain orappreciation, is enacted, such taxes shall not be applicable to the partnership or any of its operations untilMarch 31, 2015. Such an assurance may include the assurance that any tax in the nature of estate duty orinheritance tax shall not be applicable to the units, debentures or other obligations of the partnership.Exempted partnerships and overseas partnerships fall within the definition of “international businesses”for the purposes of the Stamp Duties (International Businesses Relief) Act 1990, which means that instrumentsexecuted by or in relation to an exempted partnership or an overseas partnership are exempt from stamp duties(such duties were formerly applicable under the Stamp Duties Act 1976). Thus, stamp duties are not payableupon, for example, an instrument which effects the transfer or assignment of a unit in an exempted partnership oran overseas partnership, or the sale or mortgage of partnership assets; nor are they payable upon the partnershipcapital.10.F. DIVIDENDS AND PAYING AGENTSDistribution PolicyThe BPY General Partner has sole authority to determine whether our company will make distributionsand the amount and timing of these distributions. The BPY General Partner has adopted a distribution policypursuant to which our company intends to make quarterly cash distributions in an initial amount currentlyanticipated to be approximately $1.00 per unit on an annualized basis, which initially represents an estimateddistribution yield of approximately 4% of IFRS Value. We will target an initial pay-out ratio of approximately80% of FFO. See Item 5.A. “Operating and Financial Review and Prospects — Operating Results —Performance Measures” for a discussion of FFO. We will initially pursue a distribution growth rate target in therange of 3% to 5% annually. Our company, the Property Partnership or one or more Holding Entities may (butnone is obligated to) borrow money in order to obtain sufficient cash to make a distribution.From time to time our distributions may exceed the above percentages as a result of acquisitions that areattractive on a long-term cash flow and/or total return basis but are not immediately accretive to FFO. Ourcompany’s ability to make distributions will depend on our company receiving sufficient distributions from theProperty Partnership, which in turn depend on the Property Partnership receiving sufficient distributions from theHolding Entities, and we cannot assure you that our company will in fact make cash distributions as intended. Inparticular, the amount and timing of distributions will depend upon a number of factors, including, among others,186

our actual results of operations and financial condition, the amount of cash that is generated by our operationsand investments, restrictions imposed by the terms of any indebtedness that is incurred to leverage our operationsand investments or to fund liquidity needs, levels of operating and other expenses, contingent liabilities and otherfactors that the BPY General Partner deems relevant.Distributions made by the Property Partnership will be made pro rata with respect to the PropertyPartnership’s limited partnership interests owned by us and those limited partnership interests owned byBrookfield. Our company’s ability to make distributions will also be subject to additional risks and uncertainties,including those set forth in this Form 20-F under Item 3.D. “Key Information — Risk Factors” and Item 5.“Operating and Financial Review and Prospects”. In addition, the BPY General Partner will not be permitted tocause our company to make a distribution if we do not have sufficient cash on hand to make the distribution, ifthe distribution would render our company insolvent or if, in the opinion of the BPY General Partner, thedistribution would leave us with insufficient funds to meet any future or contingent obligations.However, there can be no assurance that we will be able to make distributions in the amounts discussedabove or meet our target growth rate. Our ability to make distributions will depend on several factors, some ofwhich are out of our control, including, among other things, general economic conditions, our results ofoperations and financial condition, the amount of cash that is generated by our operations and investments,restrictions imposed by the terms of any indebtedness that is incurred to finance our operations and investmentsor to fund liquidity needs, levels of operating and other expenses and contingent liabilities. See “Special NoteRegarding Forward Looking Statements”.Distribution Reinvestment PlanFollowing the spin-off, we intend to adopt a distribution reinvestment plan for holders of our unitsresident in Canada. We may in the future expand our distribution reinvestment plan to include holders of ourunits resident in the United States. The following is a summary description of what we expect the principal termsof our company’s distribution reinvestment plan will be. To the extent Brookfield participates in our dividendreinvestment plan and reinvests distributions it receives on our units, it will receive additional units of ourcompany.Pursuant to the distribution reinvestment plan, Canadian holders of our units will be able to elect to havedistributions paid on units held by them automatically reinvested in additional units in accordance with the termsof the plan. Distributions to be reinvested in our units under the distribution reinvestment plan will be reduced bythe amount of any applicable withholding tax.Distributions due to plan participants will be paid to the plan agent, for the benefit of the plan participantsand, if a plan participant has elected to have his or her distributions automatically reinvested, or applied, onbehalf of such plan participant, to the purchase of additional units, such purchases will be made from ourcompany on the distribution date at a price per unit calculated by reference to the volume weighted average ofthe trading price for our units on a stock exchange on which our units are listed for the five trading daysimmediately preceding the date the relevant distribution is paid by our company.As soon as reasonably practicable after each distribution payment date, a statement of account will bemailed to each participant setting out the amount of the relevant cash distribution reinvested, the price of eachunit purchased, the number of units purchased under the distribution reinvestment plan on the distributionpayment date and the total number of units, computed to four decimal places, held for the account of theparticipant under the distribution reinvestment plan (or, in the case of beneficial holders, CDS Clearing andDepository Services Inc., or CDS, will receive such statement on behalf of the beneficial holders participating inthe plan). While our company will not issue fractional units, a plan participant’s entitlement to units purchasedunder the distribution reinvestment plan may include a fraction of a unit and such fractional units shallaccumulate. A cash adjustment for any fractional units will be paid by the plan agent upon the withdrawal from187

or termination by a plan participant of his or her participation in the distribution reinvestment plan or upontermination of the distribution reinvestment plan at a price per unit based upon the closing price for our units on astock exchange on which our units are listed on the trading day immediately preceding such withdrawal ortermination. A registered holder may, at any time, obtain unit certificates for any number of whole units held forthe participant’s account under the plan by notifying the plan agent. Certificates for units acquired under the planwill not be issued to participants unless specifically requested. Prior to pledging, selling or otherwise transferringunits held for a participant’s account (except for sale of our units through the plan agent), a registered holdermust request that his or her units be electronically transferred to his or her brokerage account or a unit certificatebe issued. The automatic reinvestment of distributions under the plan will not relieve participants of any incometax obligations applicable to such distributions. No brokerage commissions will be payable in connection withthe purchase of our units under the distribution reinvestment plan and all administrative costs will be borne byour company.Unitholders will be able to terminate their participation in the distribution reinvestment plan by providing,or by causing to be provided, notice to the plan agent. Such notice, if actually received by the plan agent no laterthan five business days prior to a record date, will have effect in respect of the distribution to be made as of suchdate. Thereafter, distributions to such unitholders will be in cash. In addition, unitholders may request that all orpart of their units be sold. When our units are sold through the plan agent, a holder will receive the proceeds lessa handling charge and any brokerage trading fees. Our company will be able to terminate the distributionreinvestment plan, in its sole discretion, upon notice to the plan participants and the plan agent but, such actionwill have no retroactive effect that would prejudice a participant’s interest. Our company will also be able toamend, modify or suspend the distribution reinvestment plan at any time in its sole discretion, provided that theplan agent gives notice of that amendment, modification or suspension to our unitholders, for any amendment,modification or suspension to the distribution reinvestment plan that in our company’s opinion may materiallyprejudice participants.The Property Partnership will have a corresponding distribution reinvestment plan in respect ofdistributions made to our company and to holders of the Redemption-Exchange Units. Our company does notintend to reinvest distributions it receives from the Property Partnership in the Property Partnership’s distributionreinvestment plan except to the extent that holders of our units elect to reinvest distributions pursuant to ourdistribution reinvestment plan. Brookfield has advised our company that it may from time to time reinvestdistributions it receives from us in respect of our units or from the Property Partnership in respect of theRedemption-Exchange Units pursuant to the distribution reinvestment plans of our company or the PropertyPartnership, as applicable. To the extent Brookfield reinvests distributions it receives on our units, it will receiveadditional units of our company. To the extent Brookfield elects to reinvest distributions it receives from theProperty Partnership pursuant to the Property Partnership’s dividend reinvestment plan, it will receiveRedemption-Exchange Units. Such Redemption-Exchange Units received by Brookfield also would becomesubject to the Redemption-Exchange Mechanism and may therefore result in Brookfield acquiring additionalunits of our company.PAYING AGENTWe expect that CIBC Mellon Trust Company in Toronto, Ontario will be appointed to act as paying agentfor distributions by our company.188

10.G. STATEMENT BY EXPERTSThe following financial statements:• the carve-out financial statements of the Commercial Property Operations of Brookfield AssetManagement Inc. as at December 31, 2011 and December 31, 2010 and for each of the years in the threeyearperiod ended December 31, 2011 and the supplemental schedule of investment property informationas at December 31, 2011;• the balance sheet of Brookfield Property Partners Limited as at May 31, 2012;• the balance sheet of Brookfield Property Partners L.P. as at May 31, 2012; and• the statements of operations, comprehensive income and cash flows of TRZ Holdings LLC andSubsidiaries for the year ended December 31, 2009,included in this Form 20-F have been audited by Deloitte & Touche LLP, independent registered charteredaccountants, as stated in their reports appearing herein and elsewhere in this Form 20-F. Such financialstatements are included in reliance upon the reports of such firm given upon their authority as experts inaccounting and auditing. The address of Deloitte & Touche LLP is Brookfield Place, 181 Bay Street, Suite 1400,Toronto, Ontario, M5J 2V1.Deloitte & Touche LLP has consented to the inclusion of its audit reports in this Form 20-F.10.H. DOCUMENTS ON DISPLAYAny statement in this Form 20-F about any of our contracts or other documents is not necessarilycomplete. If the contract or document is filed as an exhibit to the Form 20-F, the contract or document is deemedto modify the description contained in this Form 20-F. You must review the exhibits themselves for a completedescription of the contract or document.Brookfield Asset Management and our company are both subject to the information filing requirements ofthe Exchange Act, and accordingly are required to file periodic reports and other information with the SEC. As aforeign private issuer under the SEC’s regulations, we expect to file annual reports on Form 20-F and will furnishother reports on Form 6-K. The information disclosed in our reports may be less extensive than that required tobe disclosed in annual and quarterly reports on Forms 10-K and 10-Q required to be filed with the SEC by U.S.issuers. Moreover, as a foreign private issuer, we are not subject to the proxy requirements under Section 14 ofthe Exchange Act, and the BPY General Partner’s directors and our principal unitholders are not subject to theinsider short swing profit reporting and recovery rules under Section 16 of the Exchange Act. Our and BrookfieldAsset Management’s SEC filings are available at the SEC’s website at www.sec.gov. You may also read andcopy any document we or Brookfield Asset Management files with the SEC at the public reference facilitiesmaintained by the SEC at SEC Headquarters, Public Reference Section, 100 F Street, N.E., Washington D.C.20549. You may obtain information on the operation of the SEC’s public reference facilities by calling the SECat 1-800-SEC-0330.In addition, Brookfield Asset Management and our company are required by Canadian securities laws tofile documents electronically with Canadian securities regulatory authorities and these filings are available on ouror Brookfield Asset Management’s SEDAR profile at www.sedar.com. Written requests for such documentsshould be directed to our Corporate Secretary at 73 Front Street, 5th Floor, Hamilton HM 12, Bermuda.10.I. SUBSIDIARY INFORMATIONNot applicable.189

ITEM 11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKSee the information contained in this Form 20-F under Item 5. “Operating and Financial Review andProspects”.ITEM 12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES12.A. DEBT SECURITIESNot applicable.12.B. WARRANTS AND RIGHTSNot applicable.12.C. OTHER SECURITIESNot applicable.12.D. AMERICAN DEPOSITARY SHARESNot applicable.190

PART IIITEM 13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIESNone.ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USEOF PROCEEDSNone.ITEM 15.CONTROLS AND PROCEDURESNot applicable.ITEM 16.[RESERVED]16.A. AUDIT COMMITTEE FINANCIAL EXPERTSNot applicable.16.B. CODE OF ETHICSNot applicable.16.C. PRINCIPAL ACCOUNTANT FEES AND SERVICESNot applicable.16.D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEESNot applicable.16.E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERSNone.16.F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANTNone.16.G. CORPORATE GOVERNANCENot applicable.16.H. MINING SAFETY DISCLOSURENot applicable.191

PART IIIITEM 17.FINANCIAL STATEMENTSNot applicable.ITEM 18.FINANCIAL STATEMENTSSee the list of financial statements beginning on page F-1 which are filed as part of the registrationstatement on Form 20-F. In addition, see the Unaudited Pro Forma Financial Statements beginning on page PF-1which are filed as part of the registration statement on Form 20-F.ITEM 19.NumberEXHIBITSDescription1.1 Certificate of registration of our company, registered as of January 3, 2012**1.2 Limited Partnership Agreement of our company, dated January 3, 2012**1.3 Form of Amended and Restated Limited Partnership Agreement of our company, to be dated thedate of the spin-off*4.1 Master Purchase Agreement between our company and Brookfield Asset Management**4.2 Form of Master Services Agreement by and among Brookfield Asset Management, the ServiceRecipients and the Managers**4.3 Form of Amended and Restated Limited Partnership Agreement of the Property Partnership, to bedated the date of the spin-off*4.4 Form of Relationship Agreement among our company, the Property Partnership, the HoldingEntities, the Managers and Brookfield Asset Management**4.5 Form of Registration Rights Agreement between our company and Brookfield Asset Management**4.6 Form of Voting Agreement among Brookfield Asset Management, the Property General Partner andour company**8.1 List of significant subsidiaries of our company*15.1 Consent of Deloitte & Touche LLP*** To be filed by amendment.** Filed herewith.192

SIGNATURESThe registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that ithas duly caused and authorized the undersigned to sign this registration statement on its behalf.BROOKFIELD PROPERTY PARTNERS L.P.,by its general partner, 1648285 ALBERTA ULCBy:/s/ Richard B. ClarkName: Richard B. ClarkTitle: DirectorDate: June 12, 2012193

INDEX TO FINANCIAL STATEMENTSPageCarve-out financial statements of the Commercial Property Operations of BrookfieldAsset Management Inc. as at December 31, 2011 and December 31, 2010 and for each ofthe years in the three-year period ended December 31, 2011Condensed carve-out financial statements of the Commercial Property Operations ofBrookfield Asset Management Inc. as at March 31, 2012 and December 31, 2011 and forthe three month periods ended March 31, 2012 and March 31, 2011F-2F-43Balance sheet of Brookfield Property Partners L.P. as at May 31, 2012 F-61Balance sheet of Brookfield Property Partners Limited as at May 31, 2012 F-65Consolidated financial statements of General Growth Properties, Inc. as of December 31,2011 and December 31, 2010 and for each of the three years in the period endedDecember 31, 2011Consolidated financial statements of TRZ Holdings LLC and Subsidiaries as ofDecember 31, 2011 and December 31, 2010 and for each of the years in the three-yearperiod ended December 31, 2011F-69*F-70* To be filed by amendment.F-1

COMMERCIAL PROPERTY OPERATIONS OF BROOKFIELDASSET MANAGEMENT INC.Carve-out financial statements as at December 31, 2011 and December 31, 2010and for each of the years in the three-year periodended December 31, 2011F-2

Report of Independent Registered Chartered AccountantsTo the Board of Directors ofBrookfield Asset Management Inc.We have audited the accompanying carve-out financial statements of the Commercial Property Operations ofBrookfield Asset Management Inc. (the “Business”), which comprise the carve-out balance sheets as atDecember 31, 2011 and December 31, 2010, and the carve-out statements of income (loss), comprehensiveincome (loss), changes in equity and cashflow for each of the years in the three-year period ended December 31,2011, and the notes to the carve-out financial statements. Our audit also included a supplemental schedule ofinvestment property information as at December 31, 2011 (the “Schedule”).Management’s Responsibility for the Carve-out Financial Statements and the ScheduleManagement is responsible for the preparation and fair presentation of these carve-out financial statements inaccordance with International Financial Reporting Standards as issued by the International Accounting StandardsBoard and the Schedule, and for such internal control as management determines is necessary to enable thepreparation of carve-out financial statements and the Schedule that are free from material misstatement, whetherdue to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on these carve-out financial statements and the Schedule based on ouraudits. We conducted our audits in accordance with Canadian generally accepted auditing standards and thestandards of the Public Company Accounting Oversight Board (United States). Those standards require that wecomply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whetherthe carve-out financial statements and the Schedule are free from material misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thecarve-out financial statements and the Schedule. The procedures selected depend on the auditor’s judgment,including the assessment of the risks of material misstatement of the carve-out financial statements and theSchedule, whether due to fraud or error. In making those risk assessments, the auditor considers internal controlrelevant to the entity’s preparation and fair presentation of the carve-out financial statements and the Schedule inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, as well asevaluating the overall presentation of the carve-out financial statements and the Schedule.We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basisfor our audit opinion.OpinionIn our opinion, the carve-out financial statements present fairly, in all material respects, the financial position ofthe Business as at December 31, 2011 and December 31, 2010 and its financial performance and cashflows foreach of the years in the three-year period ended December 31, 2011 in accordance with International FinancialReporting Standards as issued by the International Accounting Standards Board. Also, in our opinion, theSchedule, when considered in relation to the carve-out financial statements taken as a whole, presents fairly in allmaterial respects the information set forth therein./s/ Deloitte & Touche LLPIndependent Registered Chartered AccountantsLicensed Public AccountantsToronto, CanadaApril 9, 2012F-3

Commercial Property Operations of Brookfield Asset Management Inc.Carve-out Balance Sheets(US$ Millions) Note Dec. 31, 2011 Dec. 31, 2010AssetsNon-current assetsInvestment properties 5 $ 27,594 $ 20,960Equity accounted investments 7 6,888 4,402Other non-current assets 9 2,532 1,954Loans and notes receivable 10 985 53737,999 27,853Current assetsLoans and notes receivable 10 773 1,543Accounts receivable and other 11 796 772Cash and cash equivalents 749 3992,318 2,714Total assets $ 40,317 $ 30,567Liabilities and equity in net assetsNon-current liabilitiesProperty debt 12 $ 13,978 $ 9,173Capital securities 13 994 1,038Other non-current liabilities 14 493 1,107Deferred tax liability 15 728 55516,193 11,873Current liabilitiesProperty debt 12 1,409 2,791Accounts payable and other liabilities 16 1,221 7592,630 3,550Equity in net assetsEquity in net assets attributable to parent company 17 11,881 7,464Non-controlling interests 17 9,613 7,680Total equity in net assets 21,494 15,144Total liabilities and equity in net assets $ 40,317 $ 30,567See accompanying notes to the carve-out financial statementsF-4

Commercial Property Operations of Brookfield Asset Management Inc.Carve-out Statements of Income (Loss)(US$ Millions) Years ended December 31, Note 2011 2010 2009Revenue 18 $ 2,820 $ 2,270 $ 1,999Property net operating income 18 1,507 1,250 1,124Investment and other income 19 177 142 981,684 1,392 1,222Interest expense 977 790 635General and administrative expense 84 88 131Depreciation and amortization 20 21 16Income before fair value gains (losses), realized gains, share of netearnings (losses) from equity accounted investments and incometaxes 603 493 440Fair value gains (losses) 20 1,112 574 (887)Realized gains 365 250 39Share of net earnings (losses) from equity accounted investments 7 2,104 870 (461)Income (loss) before income taxes 4,184 2,187 (869)Income tax (expense) benefit 15 (439) (78) 135Net income (loss) $ 3,745 $ 2,109 $ (734)Net income (loss) attributable toParent company $ 2,323 $ 1,026 $ (477)Non-controlling interests 1,422 1,083 (257)$ 3,745 $ 2,109 $ (734)See accompanying notes to the carve-out financial statementsF-5

Commercial Property Operations of Brookfield Asset Management Inc.Carve-out Statements of Comprehensive Income (Loss)(US$ Millions) Years ended December 31, Note 2011 2010 2009Net income (loss) $ 3,745 $ 2,109 $ (734)Other comprehensive income (loss)17 (c)Foreign currency translation (387) 430 847Available-for-sale securities 4 (2) (25)Cash flow hedges (258) 67 14(641) 495 836Comprehensive income $ 3,104 $ 2,604 $ 102Comprehensive income (loss) attributable toParent companyNet income (loss) $ 2,323 $ 1,026 $ (477)Other comprehensive income (loss) (365) 368 5361,958 1,394 59Non-controlling interestsNet income (loss) 1,422 1,083 (257)Other comprehensive income (loss) (276) 127 3001,146 1,210 43Total comprehensive income $ 3,104 $ 2,604 $ 102See accompanying notes to the carve-out financial statementsF-6

Commercial Property Operations of Brookfield Asset Management Inc.Carve-out Statements of Changes in Equity(US$ Millions)Accumulated Other Comprehensive IncomeEquity in netassetsForeign currencytranslationCash flowhedgesAvailable-for-salesecurities TotalEquity in netassetsattributable toparentcompanyNon-controllinginterestsTotal equityin net assetsBalance as at January 1, 2009 $ 5,622 $ - $ (32) $ (1) $ (33) $ 5,589 $ 3,931 $ 9,520Net income (loss) (477) - - - - (477) (257) (734)Other comprehensive income (loss) - 528 16 (8) 536 536 300 836Contributions 1,356 - - - - 1,356 1,445 2,801(Distributions) (1,028) - - - - (1,028) (182) (1,210)Balance as at December 31, 2009 $ 5,473 $ 528 $ (16) $ (9) $ 503 $ 5,976 $ 5,237 $11,213Net income 1,026 - - - - 1,026 1,083 2,109Other comprehensive income - 296 67 5 368 368 127 495Contributions 2,185 - - - - 2,185 1,529 3,714(Distributions) (2,091) - - - - (2,091) (296) (2,387)Balance as at December 31, 2010 $ 6,593 $ 824 $ 51 $ (4) $ 871 $ 7,464 $ 7,680 $15,144Net income 2,323 - - - - 2,323 1,422 3,745Other comprehensive income (loss) - (218) (155) 8 (365) (365) (276) (641)Contributions 2,909 - - - - 2,909 1,684 4,593(Distributions) (450) - - - - (450) (897) (1,347)Balance as at December 31, 2011 $ 11,375 $ 606 $ (104) $ 4 $ 506 $ 11,881 $ 9,613 $21,494See accompanying notes to the carve-out financial statementsF-7

Commercial Property Operations of Brookfield Asset Management Inc.Carve-out Statements of Cashflow(US$ Millions) Years ended December 31, 2011 2010 2009Operating activitiesNet income (loss) $ 3,745 $ 2,109 $ (734)Share of net earnings (losses) from equity accounted investments (2,104) (870) 461Fair value (gains) losses (1,112) (574) 887Deferred income tax 275 (39) (195)Realized gains (365) (250) (39)Accretion of discount on loan receivable (39) (28) -Depreciation and amortization 20 21 16Initial direct leasing costs (37) (19) (20)Working capital and other 1,228 460 (210)1,611 810 166Financing activitiesProperty debt, issuance 1,954 1,467 2,070Property debt, repayments (3,536) (1,906) (1,402)Other secured debt, issuance 1,022 168 304Other secured debt, repayments (683) (268) (445)Capital securities redeemed (25) - -Proceeds from equity installment receivable 121 - -Non-controlling interests, issued 667 1,038 1,024Non-controlling interests, purchased (86) - -Non-controlling interests, distributions (410) (225) (154)Contributions from parent company 307 358 769Distributions to parent company (337) (551) (133)(1,006) 81 2,033Investing activitiesInvestment properties, proceeds of dispositions 1,537 804 98Investment properties, investments (373) (692) (991)Distributions from equity accounted investments - 316 -Investment in equity accounted investments (1,053) (485) -Proceeds from sale of investments 101 109 -Financial assets, investments (150) (463) (162)Foreign currency hedges of net investments (97) (35) -Loans and notes receivables, collected 744 302 228Loans and notes receivables, advanced (181) (102) (129)Loan receivable from parent company, collected 658 -Loan receivable from parent company, advanced (364) (28) (653)Other property, plant and equipment, investments - (8) (1)Restricted cash and deposits (25) 13 (55)Capital expenditures - development and redevelopment (447) (355) (351)Capital expenditures - operating properties (605) (130) (140)(255) (754) (2,156)Increase in cash and cash equivalents 350 137 43Cash and cash equivalents, beginning of year 399 262 219Cash and cash equivalents, end of year $ 749 $ 399 $ 262See accompanying notes to the carve-out financial statementsF-8

Notes to the Carve-out Financial StatementsNOTE 1: NATURE AND DESCRIPTION OF THE OPERATIONSThe Commercial Property Operations of Brookfield Asset Management Inc. (“Brookfield” or the “parentcompany”) consist of substantially all of Brookfield’s commercial property operations, including office, retail,multi-family and industrial and opportunistic investments, located in the United States, Canada, Australia, Braziland Europe that have historically been owned and operated, both directly and through its operating entities, byBrookfield (collectively, the “Business” or the “company”). These operations include interests in 126 officeproperties and 184 retail properties. In addition, Brookfield has interests in a multi-family and industrial platformand an 18 million square foot commercial office development pipeline.Brookfield will effect a reorganization so that an interest in the Business is acquired by holding entities, whichwill be owned by a subsidiary of Brookfield Property Partners L.P. (the “partnership”), a newly formed limitedpartnership. Brookfield intends to transfer the Business through a special dividend to holders of its Class Alimited voting shares and Class B limited voting shares of the partnership’s non-voting limited partnership units(the “spin-off’). Immediately following the spin-off, holders of Class A limited voting shares and Class B limitedvoting shares of Brookfield will hold 99% of the units of the partnership. The partnership’s sole direct investmentwill be a limited partner interest in Brookfield Property L.P. (the “property partnership”) which will control theBusiness through holding entities. It is currently anticipated that the partnership and Brookfield will hold alimited partnership interests in the property partnership of approximately 10% and 90%, respectively. Thepartnership will control the strategic, financial and operating policy decisions of the property partnershippursuant to a voting agreement to be entered into between the partnership and Brookfield. Wholly-ownedsubsidiaries of Brookfield will serve as the general partners for both the partnership and the property partnership.The parent company’s registered head office is Brookfield Place, 181 Bay Street, Suite 300, Toronto, Ontario,M5J 2T3.NOTE 2: SIGNIFICANT ACCOUNTING POLICIESa) Basis of presentationThese carve-out financial statements (the “financial statements”) have been prepared in accordance withInternational Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board(“IASB”) using the historical books and records of Brookfield. The financial statements represent a carve-out ofthe assets, liabilities, revenues, expenses, and cashflows of the Business that will be contributed to thepartnership. The principal operating subsidiaries of the Business generally maintain their own independentmanagement and infrastructure. To the extent that certain resources are centralized by Brookfield and sharedacross entities including those of the Business, such as information technology, fees for access to and use of suchresources have been charged to the respective subsidiaries as a means of allocation of such costs across theoperations. Such fees are included in the results of operations of the Business. The financial statements do notinclude the parent company’s general partner interests in certain of the retail and other investments as theseinterests are not being transferred to the partnership.The financial statements present the equity in the net assets of the Business rather than the shareholders’ equity.Non-controlling interests in the net assets and results of the subsidiaries within the Business are shown separatelyin equity in the carve-out balance sheet. In addition, while the Business is not a taxable legal entity, current anddeferred income taxes have been provided in these carve-out financial statements as if it were.Due to the inherent limitations of carving out the assets, liabilities, operations and cashflows from larger entities,these financial statements may not necessarily reflect the company’s financial position, results of operations andcashflow for future periods, nor do they reflect the financial position, results of operations and cashflow thatwould have been realized had the Business been a stand-alone entity during the periods presented.F-9

The financial statements are prepared on a going concern basis and have been presented in U.S. dollars roundedto the nearest million unless otherwise indicated. The accounting policies set out below have been appliedconsistently in all material respects. Standards and interpretations effective for future accounting periods aredescribed in Note 4.b) Investment propertiesInvestment properties include operating properties held to earn rental income and properties that are beingconstructed or developed for future use as investment properties. Operating properties and developmentproperties are recorded at fair value, determined based on available market evidence, at the balance sheet date.Related fair value gains and losses are recorded in net income in the period in which they arise.The cost of development properties includes direct development costs, realty taxes and borrowing costs directlyattributable to the development. Borrowing costs associated with direct expenditures on properties underdevelopment or redevelopment are capitalized. Borrowing costs are also capitalized on the purchase cost of a siteor property acquired specifically for redevelopment in the short-term but only where activities necessary toprepare the asset for development or redevelopment are in progress. The amount of borrowing costs capitalized isdetermined first by reference to borrowings specific to the project, where relevant, and otherwise by applying aweighted average cost of borrowings to eligible expenditures after adjusting for borrowings associated with otherspecific developments. Where borrowings are associated with specific developments, the amount capitalized isthe gross cost incurred on those borrowings less any investment income arising on their temporary investment.Borrowing costs are capitalized from the commencement of the development until the date of practicalcompletion. The capitalization of borrowing costs is suspended if there are prolonged periods when developmentactivity is interrupted. The Business considers practical completion to have occurred when the property iscapable of operating in the manner intended by management. Generally this occurs upon completion ofconstruction and receipt of all necessary occupancy and other material permits. Where the Business haspre-leased space as of or prior to the start of the development and the lease requires the Business to constructtenant improvements which enhance the value of the property, practical completion is considered to occur oncompletion of such improvements.Initial direct leasing costs incurred by the Business in negotiating and arranging tenant leases are added to thecarrying amount of investment properties.c) Equity accounted investments(i) Investments in joint venturesA joint venture is a contractual arrangement pursuant to which the Business and other parties undertakean economic activity that is subject to joint control whereby the strategic financial and operating policydecisions relating to the activities of the joint venture require the unanimous consent of the partiessharing control.Joint venture arrangements that involve the establishment of a separate entity in which each venturehas an interest are referred to as jointly controlled entities. The Business reports its interests in jointlycontrolled entities using the equity method of accounting. Under the equity method, investments injointly controlled entities are carried in the carve-out balance sheet at cost as adjusted for thecompany’s proportionate share of post-acquisition changes in the net assets of the joint ventures, or forpost-acquisition changes in any excess of the company’s carrying amount over the net assets of thejoint ventures, less any identified impairment loss. When the company’s share of losses of a jointventure equals or exceeds its interest in that joint venture, the Business discontinues recognizing itsshare of further losses. An additional share of losses is provided for and a liability is recognized only tothe extent that the company has incurred legal or constructive obligations to fund the entity or madepayments on behalf of that entity.Where the Business undertakes its activities under joint venture arrangements through a direct interestin the joint venture’s assets, rather than through the establishment of a separate entity, the company’sF-10

proportionate share of joint venture assets, liabilities, revenues and expenses are recognized in thefinancial statements and classified according to their nature.Where the Business transacts with its jointly controlled entities, unrealized profits and losses areeliminated to the extent of the company’s interest in the joint venture. Balances outstanding betweenthe Business and jointly controlled entities in which it has an interest are not eliminated in thecarve-out balance sheet.(ii)Investments in associatesAn associate is an entity over which the investor has significant influence but not control and that is nota subsidiary or an interest in a joint venture.The results and assets and liabilities of associates are incorporated in the financial statements using theequity method of accounting. Under the equity method, investments in associates are carried in thecarve-out balance sheet at cost as adjusted for the company’s proportionate share of post-acquisitionchanges in the net assets of the associates, or for post-acquisition changes in any excess of thecompany’s carrying amount over the net assets of the associates, less any identified impairment loss.When the company’s share of losses of an associate equals or exceeds its interest in that associate, theBusiness discontinues recognizing its share of further losses. An additional share of losses is providedfor and a liability is recognized only to the extent that the Business has incurred legal or constructiveobligations or made payments on behalf of that associate.Where the Business transacts with an associate of the Business, profits and losses are eliminated to theextent of the company’s interest in the relevant associate. Balances outstanding between the Businessand associates are not eliminated in the carve-out balance sheet.d) Other Property, Plant and EquipmentThe company accounts for its other property, plant and equipment, using the revaluation method or the costmodel, depending on the nature of the asset and the operating segment. Other property, plant and equipmentmeasured using the revaluation method is initially measured at cost and subsequently carried at its revaluedamount, being the fair value at the date of the revaluation less any subsequent accumulated depreciation and anyaccumulated impairment losses. Under the cost method, assets are initially recorded at cost and are subsequentlydepreciated over the assets’ useful lives, unless an impairment is identified requiring a write-down to estimatedfair value.e) Loans and notes receivableLoans and notes receivable are carried at amortized cost with interest income recognized following the effectiveinterest method. Notes receivable purchased at a discount are also carried at amortized cost with discountsamortized over the remaining expected life of the loan following the effective interest method.A loan is considered impaired when, based upon current information and events, it is probable that the companywill be unable to collect all amounts due for both principal and interest according to the contractual terms of theloan agreement. Loans are evaluated individually for impairment given the unique nature and size of each loan.For each collateralized loan, the company’s finance subsidiaries perform a quarterly review of all collateralproperties underlying the loans receivables. Impairment is measured based on the present value of expectedfuture cashflows discounted at the loan’s effective interest rate or the fair value of the collateral if the loan iscollateral dependent.f) TaxationCurrent income tax assets and liabilities are measured at the amount expected to be paid to tax authorities by theparent company in respect of the Business or directly by the company’s taxable subsidiaries, net of recoveries,based on the tax rates and laws enacted or substantively enacted at the balance sheet date. Deferred income taxF-11

liabilities are provided for using the liability method on temporary differences between the tax bases and carryingamounts of assets and liabilities. Deferred income tax assets are recognized for all deductible temporarydifferences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable thatdeductions, tax credits and tax losses can be utilized. The carrying amount of deferred income tax assets isreviewed at each balance sheet date and reduced to the extent it is no longer probable that the income tax assetwill be recovered. Deferred income tax assets and liabilities are measured at the tax rates that are expected toapply to the year when the asset is realized or the liability settled, based on the tax rates and laws that have beenenacted or substantively enacted at the balance sheet date. Current and deferred income tax relating to itemsrecognized directly in equity are also recognized directly in equity.g) ProvisionsA provision is a liability of uncertain timing or amount. Provisions are recognized when the Business has apresent legal or constructive obligation as a result of past events, it is probable that an outflow of resources willbe required to settle the obligation and the amount can be reliably estimated. Provisions are not recognized forfuture operating losses. Provisions are measured at the present value of the expenditures expected to be requiredto settle the obligation using a discount rate that reflects current market assessments of the time value of moneyand the risks specific to the obligation. Provisions are re-measured at each balance sheet date using the currentdiscount rate. The increase in the provision due to passage of time is recognized as interest expense.h) Foreign currenciesThe financial statements are presented in U.S. dollars, which is the functional currency of the parent companyand the presentation currency for the financial statements.Assets and liabilities of subsidiaries or equity accounted investees having a functional currency other than theU.S. dollar are translated at the rate of exchange at the balance sheet date. Revenues and expenses are translatedat average rates for the period. The resulting foreign currency translation adjustments are recognized in othercomprehensive income (“OCI”).Foreign currency transactions are translated into the functional currency using exchange rates prevailing at thedate of the transactions. At the end of each reporting period, foreign currency denominated monetary assets andliabilities are translated to the functional currency using the prevailing rate of exchange at the balance sheet date.Gains and losses on translation of monetary items are recognized in the income statement in interest and other,except for those related to monetary liabilities qualifying as hedges of the company’s investment in foreignoperations or certain intercompany loans to or from a foreign operation for which settlement is neither plannednor likely to occur in the foreseeable future, which are included in other comprehensive income.i) Revenue recognition(i) Investment propertiesThe Business has retained substantially all of the risks and benefits of ownership of its investmentproperties and therefore accounts for leases with its tenants as operating leases. Revenue recognitionunder a lease commences when the tenant has a right to use the leased asset. Generally, this occurs onthe lease inception date or, where the Business is required to make additions to the property in the formof tenant improvements which enhance the value of the property, upon substantial completion of thoseimprovements. The total amount of contractual rent to be received from operating leases is recognizedon a straight-line basis over the term of the lease; a straight-line rent receivable, which is included inthe carrying amount of investment property, is recorded for the difference between the rental revenuerecorded and the contractual amount received.Rental revenue also includes percentage participating rents and recoveries of operating expenses,including property and capital taxes. Percentage participating rents are recognized when tenants’specified sales targets have been met. Operating expense recoveries are recognized in the period thatrecoverable costs are chargeable to tenants.F-12

(ii)Performance and management fee revenueCertain of the company’s operating subsidiaries are entitled to management fees and performance feeson the management of properties for third parties. The Business recognizes management fees as earned.The Business recognizes performance fees in revenue when the amount receivable from its fundpartners is determinable at the end of a contractually specified term.j) Derivative financial instruments and hedge accountingDerivative instruments are recorded in the carve-out balance sheets at fair value, including those derivatives thatare embedded in financial or non-financial contracts and which are not closely related to the host contract.The following summarizes the company’s classification and measurement of financial assets and liabilities:ClassificationMeasurementFinancial assetsNon-current financial assetsEquity securities designated as available-for-sale (“AFS”) AFS Fair valueU.S. Office Fund option FVTPL (1) Fair valueBrookfield Residential promissory notes Loans and receivables Amortized costLoans receivable designated as FVTPL FVTPL Fair valueOther loans receivable Loans and receivables Amortized costReceivables and other assetsAccounts receivable Loans and receivables Amortized costLoan receivable from affiliate Loans and receivables Amortized costRestricted cash and deposits Loans and receivables Amortized costCash and cash equivalents Loans and receivables Amortized costFinancial liabilitiesCommercial property debt Other liabilities Amortized cost (2)Capital securities – corporate Other liabilities Amortized costOther non-current financial liabilitiesLoan payable Other liabilities Amortized costU.S. Office Fund true-up obligation Other liabilities Amortized cost (2)Accounts payable and accrued liabilities Other liabilities Amortized cost(1) Fair value through profit and loss (“FVTPL”)(2) Except for derivatives embedded in the related financial instruments that are classified as FVTPLThe company’s subsidiaries selectively utilize derivative financial instruments primarily to manage financialrisks, including interest rate and foreign exchange risks. Derivative financial instruments are recorded at fairvalue determined on a credit adjusted basis.The Business applies hedge accounting to derivative financial instruments in cashflow hedging relationships, andto derivative and non-derivative financial instruments designated as hedges of net investments in subsidiaries.Hedge accounting is discontinued prospectively when the hedge relationship is terminated or no longer qualifiesas a hedge, or when the hedging item is sold or terminated.In cashflow hedging relationships, the effective portion of the change in the fair value of the hedging derivativeis recognized in OCI while the ineffective portion is recognized in net income. Hedging gains and lossesrecognized in accumulated other comprehensive income (“AOCI”) are reclassified to net income in the periodswhen the hedged item affects net income. Gains and losses on derivatives are immediately reclassified toinvestment and other income when the hedged item is sold or terminated or when it is determined that a hedgedforecasted transaction is no longer probable.F-13

In a net investment hedging relationship, the effective portion of foreign exchange gains and losses on thehedging instruments is recognized in OCI and the ineffective portion is recognized in net income. The amountsrecorded in AOCI are recognized in net income when there is a disposition or partial disposition of the foreignsubsidiary.Changes in the fair value of derivative instruments, including embedded derivatives, that are not designated ashedges for accounting purposes are recognized in fair value gains (losses) or general and administrative expenseconsistent with the underlying nature and purpose of the derivative instrument.The asset or liability relating to unrealized gains and losses on derivative financial instruments are recorded inaccounts receivable and other or accounts payable and other, respectively.k) GoodwillGoodwill represents the excess of the price paid for the acquisition of a consolidated entity over the fair value ofthe net identifiable tangible and intangible assets and liabilities acquired. Goodwill is allocated to the cashgenerating unit to which it relates. The Business identified cash generating units as identifiable groups of assetsthat are largely independent of the cash inflows from other assets to group of assets.Goodwill is evaluated for impairment annually or more often if events or circumstances indicate there may beimpairment. Impairment is determined for goodwill by assessing if the carrying value of a cash generating unit,including the allocated goodwill, exceeds its recoverable amount determined as the greater of the estimated fairvalue less costs to sell or the value in use. Impairment losses recognized in respect of a cash generating unit arefirst allocated to the carrying value of goodwill and any excess is allocated to the carrying amount of assets in thecash generating unit. Any goodwill impairment is charged to income in the period in which the impairment isidentified. Impairment losses on goodwill are not subsequently reversed.l) Business combinationsThe acquisition of businesses is accounted for using the acquisition method. The cost of an acquisition ismeasured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred orassumed, and equity instruments issued in exchange for control of the acquiree. The acquiree’s identifiableassets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3, “BusinessCombinations” (“IFRS 3”), are recognized at their fair values at the acquisition date, except for non-currentassets that are classified as held-for-sale in accordance with IFRS 5, “Non-current Assets Held for Sale andDiscontinued Operations”, which are recognized and measured at fair value, less costs to sell. The interests ofnon-controlling shareholders in the acquiree are initially measured at the non-controlling interests’ proportion ofthe net fair value of the identifiable assets, liabilities and contingent liabilities recognized.To the extent the fair value of consideration paid exceeds the fair value of the net identifiable tangible andintangible assets, the excess is recorded as goodwill. To the extent the fair value of consideration paid is less thanthe fair value of net identifiable tangible and intangible assets, the excess is recognized in net income.Where a business combination is achieved in stages, previously held interests in the acquired entity arere-measured to fair value at the acquisition date, which is the date control is obtained, and the resulting gain orloss, if any, is recognized in net income. Amounts arising from interests in the acquiree prior to the acquisitiondate that have previously been recognized in other comprehensive income are reclassified to net income.Changes in the company’s ownership interest of a subsidiary that do not result in a gain or loss of control areaccounted for as equity transactions and are recorded as a component of equity. Acquisition costs are recorded asan expense in net income as incurred.m) Cash and cash equivalentsCash and cash equivalents include cash and short-term investments with original maturities of three months orless.F-14

n) Critical judgments in applying accounting policiesThe following are the critical judgments that have been made in applying the company’s accounting policies andthat have the most significant effect on the amounts in the financial statements:(i)(ii)Investment in U.S. Office FundThe company’s investment in the U.S. Office Fund (the “Fund”) is described in Note 6. The criticaljudgments made in accounting for the Fund relate to the company’s determination that it obtainedcontrol of the Fund upon exercise of the U.S. Office Fund Option, which is described in Note 6, in thethird quarter of 2011, the measurement of the transactions related to the exercise of the U.S. OfficeFund Option and redemption of non-controlling interests in the Fund, as well as the classification ofgains or losses resulting from the exercise of the option and redemption of non-controlling interests inearnings or equity. Prior to exercise of the U.S. Office Fund Option, critical judgments in respect of theaccounting for the Fund related to the determination that the Fund was subject to joint control based onthe rights assigned to the company and its joint venture partners under the joint venture agreement andthe classification of certain of the investments in the venture as liabilities or equity, the identification ofcontractual provisions in the joint venture agreement that are accounted for separately as financialinstruments under IAS 39, “Financial Instruments – Recognition and Measurement” (“IAS 39”).Investment propertyThe company’s accounting policies relating to investment property are described in Note 2(b). Inapplying this policy, judgment is applied in determining whether certain costs are additions to thecarrying amount of the property and, for properties under development, identifying the point at whichpractical completion of the property occurs and identifying the directly attributable borrowing costs tobe included in the carrying value of the development property. Judgment is also applied in determiningthe extent and frequency of independent appraisals.(iii) Income taxesThe Business applies judgment in determining the tax rate applicable to its Real Estate InvestmentTrust (“REIT”) subsidiaries and identifying the temporary differences related to such subsidiaries withrespect to which deferred income taxes are recognized. Deferred taxes related to temporary differencesarising in the company’s REIT subsidiaries, joint ventures and associates are measured based on the taxrates applicable to distributions received by the investor entity on the basis that REITs can deductdividends or distributions paid such that their liability for income taxes is substantially reduced oreliminated for the year, and the Business intends that these entities will continue to distribute theirtaxable income and continue to qualify as REITs for the foreseeable future.The Business measures deferred income taxes associated with its investment properties based on itsspecific intention with respect to each asset at the end of the reporting period. Where the Business has aspecific intention to sell a property in the foreseeable future, deferred taxes on the building portion ofthe investment property are measured based on the tax consequences following from the disposition ofthe property. Otherwise, deferred taxes are measured on the basis the carrying value of the investmentproperty will be recovered substantially through use. Judgment is required in determining the mannerin which the carrying amount of each investment property will be recovered.The Business also makes judgments with respect to the taxation of gains inherent in its investments inforeign subsidiaries and joint ventures. While the Business believes that the recovery of its originalinvestment in these foreign subsidiaries and joint ventures will not result in additional taxes, certainunremitted gains inherent in those entities could be subject to foreign taxes depending on the manner ofrealization.(iv) LeasesThe company’s policy for revenue recognition on operating properties is described in Note 2(h)(i). Inapplying this policy, the Business makes judgments with respect to whether tenant improvementsF-15

provided in connection with a lease enhance the value of the leased property which determines whethersuch amounts are treated as additions to operating property as well as the point in time at whichrevenue recognition under the lease commences. In addition, where a lease allows a tenant to elect totake all or a portion of any unused tenant improvement allowance as a rent abatement, the Businessmust exercise judgment in determining the extent to which the allowance represents an inducement thatis amortized as a reduction of lease revenue over the term of the lease.The Business also makes judgments in determining whether certain leases, in particular those tenantleases with long contractual terms where the lessee is the sole tenant in a property and long-termground leases where the Business is lessor, are operating or finance leases. The Business hasdetermined that all of its leases are operating leases.(v)Financial instrumentsThe company’s accounting policies relating to financial instruments are described in Note 2(i). Thecritical judgments inherent in these policies relate to applying the criteria set out in IAS 39, “FinancialInstruments: Recognition and Measurement” (“IAS 39”) to designate financial instruments asamortized cost, fair value through profit or loss (“FVTPL”) or available for sale (“AFS”), assessmentof the effectiveness of hedging relationships, determining whether the Business has significantinfluence over investees with which it has contractual relationships in addition to the financialinstrument it holds and identification of embedded derivatives subject to fair value measurement incertain hybrid instruments.The Business has determined that, notwithstanding its 22% common equity interest, it does notexercise significant influence over Canary Wharf Group plc, a privately held commercial propertyinvestment and development company in the United Kingdom, as it is not able to elect a member of theboard or otherwise influence its financial and operating decisions.(vi) Level of ControlWhen determining the appropriate basis of accounting for the company’s investments, the companyuses the following critical judgments and assumptions: the degree of control or influence that thecompany exerts; the amount of potential voting rights which provide the company or unrelated partiesvoting powers; the ability to appoint directors, the ability of other investors to remove the company as amanager or general partner in a controlled partnership; and the amount of benefit that the companyreceives relative to other investors. Other critical estimates and judgments utilized in the preparation ofthe company’s financial statements are: assessment of net recoverable amounts; net realizable values;depreciation and amortization rates and useful lives; value of goodwill and intangible assets; ability toutilize tax losses and other tax measurements; and the determination of functional currency. Criticalestimates and judgments also include the determination of effectiveness of financial hedges foraccounting purposes; the likelihood and timing of anticipated transactions for hedge accounting; thefair value of assets held as collateral and the company’s ability to hold financial assets, and theselection of accounting policies.(vii) Common control transactionsIFRS does not include specific measurement guidance for transfers of businesses or subsidiariesbetween entities under common control. Accordingly, the Business has developed a policy to accountfor such transactions taking into consideration other guidance in the IFRS framework andpronouncements of other standard-setting bodies. The company’s policy is to record assets andliabilities recognized as a result of transfers of businesses or subsidiaries between entities undercommon control at the carrying value on the transferor’s financial statements. Differences between thecarrying amount of the consideration given or received, where the Business is the transferor, and thecarrying amount of the assets and liabilities transferred are recorded directly in equity.F-16

o) Critical accounting estimates and assumptionsThe company makes estimates and assumptions that affect carried amounts of assets and liabilities, disclosure ofcontingent assets and liabilities and the reported amount of earnings for the period. Actual results could differfrom estimates. The estimates and assumptions that are critical to the determination of the amounts reported inthe financial statements relate to the following:(i)(ii)Investment propertyThe critical estimates and assumptions underlying the valuation of operating properties and propertydevelopments are set out in Note 5.Financial instrumentsAs discussed in Note 9, the Business determines the fair value of its warrants to acquire commonshares of General Growth Properties (“GGP”) using a Black-Scholes option pricing model wherein it isrequired to make estimates and assumptions regarding the expected future volatility of GGP’s sharesand the term of the warrants.The Business also has certain financial assets and liabilities with embedded participation featuresrelated to the values of investment properties whose fair values are based on the fair values of therelated properties.The Business holds other financial instruments that represent equity interests in investment propertyentities that are measured at fair value as these financial instruments are designated as FVTPL or AFS.Estimation of the fair value of these instruments is also subject to the estimates and assumptionsassociated with investment properties.The fair value of interest rate caps is determined based on generally accepted pricing models usingquoted market interest rates for the appropriate term. Interest rate swaps are valued at the present valueof estimated future cashflows and discounted based on applicable yield curves derived from marketinterest rates.Application of the effective interest method to certain financial instruments involves estimates andassumptions about the timing and amount of future principal and interest payments.p) Earnings per shareThe company’s historical capital structure is not indicative of its prospective structure since no direct ownershiprelationship existed among all the various units comprising the Business. Accordingly, historical earnings pershare has not been presented in the financial statements.NOTE 3: ADOPTION OF ACCOUNTING STANDARDOn November 4, 2009, the IASB issued a revised version of IAS 24, “Related Party Disclosures” (“IAS 24”).IAS 24 requires entities to disclose in their financial statements information about transactions with relatedparties. Generally, two parties are related to each other if one party controls, or significantly influences, the otherparty. IAS 24 has simplified the definition of a related party and removed certain of the disclosures required bythe predecessor standard. The revised standard is effective for annual periods beginning on or after January 1,2011. The related party disclosures included in these financial statements have been prepared in accordance withthe revised standard.NOTE 4: FUTURE ACCOUNTING POLICY CHANGESThe following are the accounting policies that the Business expects to adopt in the future:(a) Financial InstrumentsIFRS 9, “Financial Instruments” (“IFRS 9”) is a multi-phase project to replace IAS 39. IFRS 9introduces new requirements for classifying and measuring financial assets. In October 2010 the IASBreissued IFRS 9, incorporating new requirements on accounting for financial liabilities and carryingF-17

over from IAS 39 the requirements for de-recognition of financial assets and financial liabilities. InDecember 2011, the IASB issued “Mandatory Effective Date of IFRS 9 and Transition Disclosures”,which amended the effective date of IFRS 9 to annual periods beginning on or after January 1, 2015,and modified the relief from restating comparative periods and the associated disclosures in IFRS 7.Early adoption is permitted. The IASB intends to expand IFRS 9 to add new requirements forimpairment of financial assets measured at amortized cost and hedge accounting. On completion ofthese various phases, IFRS 9 will be a complete replacement of IAS 39.(b)(c)(d)(e)(f)Consolidated Financial StatementsIFRS 10, “Consolidated Financial Statements” (“IFRS 10”) establishes principles for the preparation ofan entity’s financial statements when it controls one or more other entities. The standard defines theprinciple of control and establishes control as the basis for determining which entities are consolidatedin the financial statements of the reporting entity. The standard also sets out the accountingrequirements for the preparation of consolidated financial statements.Joint ArrangementsIFRS 11, “Joint Arrangements” (“IFRS 11”) replaces the existing IAS 31, “Interests in Joint Ventures”(“IAS 31”). IFRS 11 requires that reporting entities consider whether a joint arrangement is structuredthrough a separate vehicle, as well as the terms of the contractual arrangement and other relevant factsand circumstances, to assess whether the venture is entitled to only the net assets of the jointarrangement (a “joint venture”) or to its share of the assets and liabilities of the joint arrangement (a“joint operation”). Joint ventures are accounted for using the equity method, whereas joint operationsare accounted for using proportionate consolidation.Disclosure of Interests in Other EntitiesIFRS 12, “Disclosure of Interests in Other Entities” (“IFRS 12”) applies to entities that have an interestin a subsidiary, a joint arrangement, an associate or an unconsolidated structured entity. The standardrequires the reporting entity to disclose information that enables users of financial statements toevaluate: i.) the nature of, and risks associated with, the reporting entity’s interests in other entities; andii.) the effects of those interests on the reporting entity’s financial position, financial performance andcashflows.Fair Value MeasurementIFRS 13, “Fair Value Measurement” (“IFRS 13”) replaces the current guidance on fair valuemeasurement in IFRS with a single standard. The standard defines fair value, provides guidance on itsdetermination and requires disclosures about fair value measurements but does not change therequirements about the items that should be measured and disclosed at fair value.Income TaxesAmendments have been made to IAS 12, “Income Taxes” (“IAS 12”), that are applicable to themeasurement of deferred tax liabilities and deferred tax assets where investment property is measuredusing the fair value model in IAS 40, “Investment Property”. The amendments introduce a rebuttablepresumption that, for purposes of determining deferred tax consequences associated with temporarydifferences relating to investment properties, the carrying amount of an investment property isrecovered entirely through a sale. This presumption is rebutted if the investment property is held withina business model whose objective is to consume substantially all of the economic benefits embodied inthe investment property over time, rather than through a sale.Each of the above are effective for annual periods beginning on or after January 1, 2013, except for IFRS 9 andthe amendment to IAS 12 which are effective for annual periods beginning on or after January 1, 2015 andJanuary 1, 2012, respectively. Earlier application is permitted for each standard. The Business anticipatesadopting each of the above in the first quarter of the year for which the standard is applicable and is currentlyevaluating the impact of each to its financial statements.F-18

NOTE 5: INVESTMENT PROPERTIES(US$ Millions)OperatingpropertiesDec. 31, 2011 Dec. 31, 2010DevelopmentOperating Developmentproperties Total properties propertiesTotalBalance at beginning of year $ 19,395 $ 1,565 $ 20,960 $ 17,073 $ 1,297 $ 18,370Additions (1) 6,424 158 6,582 1,266 124 1,390Dispositions (2) (1,661) - (1,661) (704) - (704)Reclassification of development to operating 166 (166) - - - -Capitalized construction costs 293 251 544 135 135 270Capitalized interest costs 37 90 127 - 63 63Fair value gains (losses) (3) 1,374 (15) 1,359 895 (97) 798Foreign currency translation and other changes (298) (19) (317) 730 43 773Balance at end of year $ 25,730 $ 1,864 $ 27,594 $ 19,395 $ 1,565 $ 20,960(1) Additions include property acquisitions and investment, capital expenditures and initial direct leasing costs.(2) Dispositions represent fair value at time of sale, or the selling price.(3) Fair value gains (losses) includes realized gains of $365 million (2010 - $250 million).The Business determines the fair value of each operating property based upon, among other things, rental income fromcurrent leases and assumptions about rental income from future leases reflecting market conditions at the applicablebalance sheet dates, less future cash outflows in respect of such leases. Fair values are primarily determined bydiscounting the expected future cashflows, generally over a term of 10 years including a terminal value based on theapplication of a capitalization rate to estimated year 11 cashflows. Certain operating properties are valued using a directcapitalization approach whereby a capitalization rate is applied to estimated current year cashflows. Developmentsproperties under active development are also measured using a discounted cashflow model, net of costs to complete, asof the balance sheet date. Development sites in the planning phases are measured using comparable market values forsimilar assets. In accordance with its policy, the Business measures its operating properties and development propertiesusing valuations prepared by management. In connection with determining these values, the Business obtainsvaluations of selected operating properties and development properties prepared by qualified external valuationprofessionals and considers the results of such valuations in arriving at its own conclusions on values. Investmentproperties with an aggregate fair value of $11,910 million were valued by qualified external valuation professionalsduring the year ended December 31, 2011 (2010 - $6,806 million).The key valuation metrics for operating properties, including properties accounted for under the equity method,are set out in the following tables:(US$ Millions)Valuation MethodDiscountRateDecember 31, 2011 December 31, 2010Terminal InvestmentTerminalCapitalization Horizon Discount CapitalizationRate (yrs) Rate RateInvestmentHorizon(yrs)OfficeUnited States DCF 7.5% 6.3% 12 8.1% 6.7% 10Canada DCF 6.7% 6.2% 11 6.9% 6.3% 11Australia DCF 9.1% 7.5% 10 9.2% 7.7% 10Europe Direct Capitalization 6.1% (1) n/a n/a 6.5% (1) n/a n/aRetailUnited States Direct Capitalization 6.0% (1) n/a n/a 6.7% (1) n/a n/aAustralia DCF 9.8% 8.9% 10 9.8% 9.0% 10Brazil DCF 9.6% 7.3% 10 10.0% 7.3% 10Europe Direct Capitalization - - - 8.1% (1) n/a n/aMulti-Family and IndustrialUnited States DCF 8.6% 8.3% 10 8.4% 6.6% 10Canada DCF 8.7% 7.7% 10 9.0% 7.6% 10Opportunistic InvestmentsUnited States DCF 8.2% 8.1% 10 8.7% 8.1% 10(1) The valuation method used is the direct capitalization method. The amounts presented as the discount rate relate to the impliedcapitalization rate. The terminal capitalization rate and investment horizon are not applicable.F-19

Values are most sensitive to changes in discount rates and timing or variability of cashflows.Included in operating properties is $308 million (2010 - $255 million) of net straight line rent receivables arisingfrom the recognition of rental revenue on a straight line basis over the lease term in accordance with IAS 17,“Leases.”Operating properties with a fair value of approximately $4.9 billion (2010 - $4.8 billion) are situated on land heldunder leases or other agreements largely expiring after the year 2065. Investment properties do not include anyproperties held under operating leases.During the year ended December 31, 2011, the Business capitalized a total of $341 million (2010 - $198 million)of costs related to property developments. Included in this amount is $251 million (2010 - $135 million) ofconstruction and related costs and $90 million (2010 - $63 million) of borrowing costs capitalized. The weightedaverage rate used for the capitalization of borrowing costs to development properties is 7.1% (2010 - 6.7%).Investment properties with a fair value of $22.0 billion (2010 - $16.1 billion) are pledged as security for propertydebt.NOTE 6: INVESTMENT IN U.S. OFFICE FUNDThe company’s interest in the U.S. Office Fund is held through an indirect interest in TRZ Holdings LLC (“TRZHoldings”), an entity originally established by the company and a joint venture partner (the “JV partner”). Underthe terms of a joint venture agreement, the JV partner held an option, commencing January 2011 for nine months,to call certain properties sub-managed by the JV partner in exchange for its equity interest in TRZ Holdings; inthe event the JV partner did not first exercise its option, the Business had an option, commencing in 2013 for aperiod of 14 months, to put the JV partner’s sub-managed properties to the JV partner in redemption of itsinterest in TRZ Holdings (collectively, the “U.S. Office Fund Option”).On August 9, 2011, the JV partner exercised the U.S. Office Fund Option, redeeming its equity interest in TRZHoldings in exchange for its sub-managed properties and repayment of TRZ Holdings’ debt associated with thoseproperties. Prior to the exercise of the U.S. Office Fund Option, the Business and the JV partner had joint controlover the strategic financial and operating policy decisions of TRZ Holdings and it was accounted for as a jointlycontrolled entity following the equity method of accounting. Following the exercise of the U.S. Office FundOption, the Business held an 82.72% equity interest in TRZ Holdings and obtained control over the strategicfinancial and operating policy decisions of the entity. Accordingly, the Business has consolidated its interest inTRZ Holdings effective August 9, 2011 and recognized the assets, liabilities and non-controlling interests in TRZHoldings at fair value as at that date in accordance with IFRS 3, “Business Combinations”.The following is a summary of the amounts assigned to each major class of asset and liability of TRZ Holdings atthe date the Business obtained control:(US$ Millions) As at August 9, 2011Commercial properties and developments $ 4,953Cash and cash equivalents 32Restricted cash 44Accounts receivable and other assets 40Equity accounted investments 685Accounts payable and other (225)Commercial property debt assumed (3,293)Total $ 2,236Brookfield’s net interest $ 1,870Non-controlling interest (1) $ 366(1) Includes $24 million of non-controlling interest in net liabilities of an intermediary subsidiary.F-20

The Business recognized the non-controlling interests in the net assets of TRZ Holdings at a fair value of $366million determined based on the non-controlling interests proportionate ownership in the net assets.The Business did not provide any consideration upon the change in control except for the payment of the U.S.Office Fund true-up consideration payable under the joint venture agreement with the JV partner. Accordingly,the excess of the fair value of the net assets of TRZ Holdings at the date control was obtained over the carryingamount of the company’s investment in the U.S. Office Fund measured under the equity method of accounting of$212 million has been recognized in fair value gains (losses) (refer to Note 20).The company’s carve-out statement of income includes revenues and net earnings from TRZ Holdings fromAugust 9, 2011 through December 31, 2011 of $226 million and $195 million, respectively. Prior to the exerciseof the U.S. Office Fund Option, the company’s share of the earnings of TRZ Holdings were included in share ofnet earnings (losses) from equity accounted investments.Summarized financial information with respect to TRZ Holdings for the period during which it was accountedfor as a jointly controlled entity is set out below:(US$ Millions) Dec. 31, 2010Non-current assetsCommercial properties $ 7,500Commercial developments 44Current assets 258Total assets 7,802Non-current liabilitiesCommercial property debt 5,516Current liabilities 288Total liabilities 5,804Net assets $ 1,998Company’s share of net assets (1) $ 1,285(1) Comparative amount at December 31, 2010 includes $63 million representing the excess of the company’s carrying amount over its shareof the net assets of the venture.(US$ Millions) 2011 (1) 2010Revenue $ 476 $ 865Expenses (345) (623)Earnings before fair value gains 131 242Fair value gains (losses) 585 459Net earnings $ 716 $ 701Company’s share of net earnings (2,3) $ 383 $ 366(1) For the period from January 1, 2011 to August 8, 2011.(2) Includes non-controlling interests share of earnings (losses) of $76 million for the year ended December 31, 2011 (2010 – $75 million).(3) Net of $63 million for the year ended December 31, 2011 (2010 – $79 million) representing the amortization of the excess of the company’scarrying amount over its share of the net assets of the venture.During the fourth quarter of 2011, the U.S. Office Fund sold Newport Tower in Jersey City for gross proceeds of$378 million.During the second quarter of 2011, the U.S. Office Fund sold its interest in 1400 Smith Street in Houston forgross proceeds of $340 million. The loss associated with the sale of this property of $1 million is included in thecompany’s share of net earnings (losses) of equity accounted investments. The loss is related to the selling costsassociated with the sale.F-21

NOTE 7: EQUITY ACCOUNTED INVESTMENTSThe following table presents principal business activity, ownership interest and carrying value of the company’sinvestments in equity accounted jointly controlled entities and associates:(US$ Millions) Ownership interest Carrying valueName of Property / Investees Principal Business Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010Joint controlled entitiesU.S. Office Fund (1) Office Properties - 47% $ - $ 1,285Grace Building, New York (1) Office Properties 50% - 618 -245 Park Avenue, New York Office Properties 51% 51% 619 580Four World Financial Center, New York Office Properties - 51% - 303First Canadian Place, Toronto Office Properties - 25% - 4Bourke Place Trust, Sydney Office Properties 43% 43% 187 183Darling Park Complex, Sydney Office Properties 30% 50% 349 350E&Y Complex, Sydney Office Properties 50% 50% 275 282Various Various 13% - 75% 25-60% 728 3842,776 3,371Investments in associatesGeneral Growth Properties (2) Retail Properties 23% 10% 4,099 1,014Various Various 25% - 40% 25-40% 13 174,112 1,031Total $ 6,888 $ 4,402(1) U.S. Office fund properties are consolidated beginning in Q3 2011, with the exception of several assets which continue to be equityaccounted. The Grace Building carrying value was included in the U.S. Office Fund at December 31, 2010.(2) The 23% ownership interest relates to the Company’s consolidated ownership in GGP which includes the interests of fund investorscontrolled by the Company and which are required to be consolidated in the Company’s financial statements. The Company’s net economicinterest in GGP is 21%.Other jointly controlled entities hold individual operating properties and property developments that the Businessowns together with co-owners where the strategic financial and operating decisions require approval of theco-owners.In November 2010, a consortium led by Brookfield sponsored the recapitalization of GGP and acquired a 27%economic interest in the reorganized GGP on a fully diluted basis, with 10% being owned by Brookfield. InFebruary 2011, Brookfield acquired an additional 11% economic interest in GGP for consideration of $1.7billion. The fair value of the company’s interest in GGP as of December 31, 2011 is $4.1 billion (2010 - $1.0billion). A portion of the company’s shares in GGP are subject to certain restrictions regarding transfer or sale.There are no published prices for the company’s other equity accounted investments.Summarized financial information in respect of the company’s equity accounted investments is provided below:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Non-current assets $ 43,861 $ 42,127Current assets 1,595 4,100Total assets 45,456 46,227Non-current liabilities 23,893 27,382Current liabilities 271 2,488Total liabilities 24,164 29,870Net assets $ 21,292 $ 16,357(US$ Millions) 2011 2010 2009Revenue $ 5,309 $ 2,096 $ 1,920Expenses 3,737 1,548 1,455Income before fair value gains (losses) 1,572 548 465Fair value gains (losses) 5,962 885 (1,464)Net income (loss) 7,534 1,433 (999)Company’s share of net earnings (losses) $ 2,104 $ 870 $ (461)F-22

NOTE 8: JOINTLY CONTROLLED ASSETSThe Business has recorded its proportionate share of the related assets, liabilities, revenue and expenses ofproperties subject to joint control following the proportionate consolidation method. Summarized financialinformation in respect of the company’s interest in jointly controlled assets is set out below:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Non-current assets $ 2,605 $ 2,782Current assets 38 39Total assets 2,643 2,821Non-current liabilities 850 976Current liabilities 186 157Total liabilities 1,036 1,133Net assets $ 1,607 $ 1,688(US$ Millions) 2011 2010 2009Revenue $ 256 $ 250 $ 208Expenses 171 152 112Income before fair value gains (losses) 85 98 96Fair value gains (losses) 78 71 (253)Net income (loss) $ 163 $ 169 $ (157)NOTE 9: OTHER NON-CURRENT ASSETSThe components of other non-current assets are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Securities designated as FVTPL $ 856 $ 698Derivative assets 210 507Securities designated as AFS 194 259Goodwill 150 174Other non-current assets 1,122 316$ 2,532 $ 1,954Included in equity securities designated as FVTPL is a 22% common equity interest in Canary Wharf Group plc,a privately held commercial property investment and development company in the United Kingdom.Derivative assets include the carrying amount of warrants to purchase shares of common stock of GGP and TheHoward Hughes Corporation (“HHC”) with a carrying amount of $210 million (2010 - $197 million). The fairvalue of the warrants is determined using a Black-Scholes option pricing model, assuming a 6 year term, 37%volatility, and a risk free interest rate of 1.1%. Included in derivative assets in 2010 is $310 million in respect ofthe U.S. Office Fund Option. In the third quarter of 2011, the U.S. Office Fund Option, having a carrying amountof $241 million, was derecognized as a result of the exercise of the option by the company’s JV partner (refer toNote 6) with a corresponding adjustment to fair value gains (losses) in the carve-out statement of income (loss).Securities designated as AFS include $107 million (2010 - $106 million) representing the company’s commonand preferred equity interest in an office property in Washington, D.C. which is pledged as security for a loanpayable to the issuer of $92 million (2010 - $93 million) recognized in other non-current liabilities. Also includedin securities designated as AFS are commercial mortgage-backed securities (“CMBS”) with an estimated fairvalue of $46 million (2010 - $107 million) and common shares with a fair value of based on quoted market pricesof $41 million (2010 - $46 million).Goodwill represents a portfolio premium recognized in connection with the purchase of the company’s Brazilianretail assets.F-23

Included in other non-current assets is a hotel and casino operating asset of $820 million (2010 - nil) that wasacquired subsequent to foreclosure on debt owned by our finance fund during 2011. In addition, there is a $145million (2010 - $145 million) receivable from Brookfield upon the earlier of the exercise by Brookfield OfficeProperties Inc. (“BPO”), a 51% owned subsidiary of Brookfield that is included in the Business, of its option toacquire direct ownership of certain properties in the Australian portfolio from a subsidiary of Brookfield on thematurity of the related loans. See Note 24 for related party disclosures.NOTE 10: LOANS AND NOTES RECEIVABLELoans and notes receivable reside primarily in the company’s real estate finance funds and are generally securedby commercial and other income producing real property.(US$ Millions) Type Interest Rate Maturity Date Dec. 31, 2011 Dec. 31, 2010Variable rate LIBOR plus 1.00% to 11.00% 2010 to 2014 $ 1,009 $ 2,008Fixed rate 6.52% to 8.00% 2010 to 2012 715 34Other Non-Interest Bearing On Demand 34 38$ 1,758 $ 2,080Current 2010 to 2011 $ 773 $ 1,543Non-current 2012 to 2014 985 537$ 1,758 $ 2,080Included in loans and notes receivable is $107 million (2010 - $110 million) of loans receivable in Euros of€83 million (2010 - €83 million). Loans receivable of $0.7 billion have been pledged as collateral for borrowingsunder credit facilities (2010 - $1.0 billion). Also included in notes receivable is $470 million (2010 - nil) relatedto the unsecured promissory notes of C$480 million as partial proceeds for the disposition of the company’sresidential development segment to Brookfield Residential Properties Inc. (“BRPI”).At December 31, 2010, loans receivable included $504 million representing the company’s interest in debtsecurities issued by the U.S. Office Fund, which has been settled during 2011.A summary of loans and notes receivable by collateral asset class as of December 31, 2011 and 2010, is asfollows:(US$ Millions) December 31, 2011 December 31, 2010Unpaid Principal Balance Percentage of Portfolio (1) Unpaid Principal Balance Percentage of Portfolio (1)Asset ClassHotel $ 401 33% $ 520 25%Office 814 67% 1,249 60%Retail - - 17 1%Nursing homes - - 153 7%Residential - - 141 7%Total collateralized $ 1,215 100% $ 2,080 100%(1) Represents percentage of collateralized loans.In the year ended December 31, 2011, an impairment charge of nil (2010 - $53 million; 2009 - $58 million) wasrecognized in respect of the company’s loans and notes receivable.NOTE 11: ACCOUNTS RECEIVABLE AND OTHERThe components of receivables and other assets are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Accounts receivable (1) $ 393 $ 479Restricted cash 185 165Other current assets 218 128$ 796 $ 772(1) Includes related party receivables in the amount of $49 million (2010 - $77 million) – see Note 24 for related party disclosures.F-24

NOTE 12: PROPERTY DEBTProperty debt includes the following:Dec. 31, 2011 Dec. 31, 2010(US$ Millions) Weighted Average Rate Debt Balance Weighted Average Rate Debt BalanceUnsecured FacilitiesBPO revolving facility 2.4% $ 264 - $ -BPO Canada revolving facility 3.3% 117 - -Bridge facility (1) - - 3.3% 428Secured Property DebtFixed rate 5.9% 7,946 6.0% 6,803Variable rate 6.8% 7,060 6.6% 4,7336.2% $ 15,387 6.1% $ 11,964Current $ 1,409 $ 2,791Non-current 13,978 9,173$ 15,387 $ 11,964(1) See Note 24 for related party disclosures.Property debt is secured and non-recourse to the Business. Unsecured facilities are recourse to the assets of theoperating subsidiaries issuing such debt.Property debt includes foreign currency denominated debt payable in the functional currencies of the borrowingsubsidiaries. Property debt by currency is as follows:Dec. 31, 2011 Dec. 31, 2010(US$ Millions) US$ Balance Local Currency Balance US$ Balance Local Currency BalanceU.S. dollars $ 8,753 $ 8,753 $ 5,319 $ 5,319Canadian dollars 2,033 C$ 2,078 1,767 C$ 1,764Australian dollars 3,148 A$ 3,085 2,660 A$ 2,599Brazilian reais 1,011 R$ 1,896 1,262 R$ 2,102British pounds 442 £ 284 699 £ 448New Zealand dollars - $ - 257 NZ$ 330$ 15,387 $ 11,964Included in property debt is an embedded derivative representing a lender’s right to participate in theappreciation in value of a notional 25% equity interest in the property secured by its mortgage that can be settled,at the company’s option, in cash or equity in the underlying property on maturity of the debt in 2014. Theembedded derivative is measured at FVTPL with changes in fair value reported in earnings as fair value gains(losses). The carrying amount of the embedded derivative at December 31, 2011 is $56 million (2010 - $54million).F-25

NOTE 13: CAPITAL SECURITIESCapital securities includes certain of the Class AAA preferred shares issued by BPO which are presented asliabilities on the basis that they may be settled, at the issuer’s option, in cash or the equivalent value of a variablenumber of the issuer’s common shares.(US$ Millions, except share information)SharesOutstandingCumulativeDividend Rate Dec. 31, 2011 (1) Dec. 31, 2010 (1)Class AAA Series F 8,000,000 6.00% $ 196 $ 200Class AAA Series G 4,400,000 5.25% 110 110Class AAA Series H 8,000,000 5.75% 196 200Class AAA Series I 6,130,022 5.20% 150 179Class AAA Series J 8,000,000 5.00% 196 200Class AAA Series K 6,000,000 5.20% 146 149Total $ 994 $ 1,038(1) Net of transaction costs of $1 million at December 31, 2011 (2010 - $2 million) which are amortized to interest expense over the life of the securities using theeffective interest method.Capital securities includes $884 million (2010 - $928 million) repayable in Canadian dollars of C$903 million(2010 – C$926 million).The redemption terms of the Class AAA Preferred Shares are as follows:Redemption Date (1) Redemption Price (2) Company’s Option (3) Holder’s Option (4)Series F September 30, 2009 C$25.75 September 30, 2009 March 31, 2013Series G June 30, 2011 US$26.00 June 30, 2011 September 30, 2015Series H December 31, 2011 C$26.00 December 31, 2011 December 31, 2015Series I December 31, 2008 C$25.75 December 31, 2008 December 31, 2010Series J June 30, 2010 C$26.00 June 30, 2010 December 31, 2014Series K December 31, 2012 C$26.00 December 31, 2012 December 31, 2016(1) Subject to applicable law and rights of the company, the company may, on or after the dates specified above, redeem Class AAA preferred shares for cash asfollows: the Series F at a price of C$25.75, if redeemed during the 12 months commencing September 30, 2009 and decreasing by C$0.25 each 12-monthperiod thereafter to a price per share of C$25.00 if redeemed on or after September 30, 2012; the Series G at a price of US$26.00, if redeemed during the 12months commencing June 30, 2011 and decreasing by US$0.33 each 12-month period thereafter to a price per share of US$25.00 if redeemed on or afterJune 30, 2014; the Series H at a price of C$26.00, if redeemed during the 12 months commencing December 31, 2011 and decreasing by C$0.33 each12-month period thereafter to a price per share of C$25.00 if redeemed on or after December 31, 2014; the Series I at a price of C$25.75, if redeemed duringthe 12 months commencing December 31, 2008 and decreasing by C$0.25 each 12-month period thereafter to a price per share of C$25.00 if redeemed on orafter December 31, 2010; the Series J at a price of C$26.00 if redeemed during the 12 months commencing June 30, 2010 and decreasing by C$0.25 each12-month period thereafter to a price per share of C$25.00 if redeemed on or after June 30, 2014; the Series K at a price of C$26.00 if redeemed during the 12months commencing December 31, 2012 and decreasing by C$0.33 each 12-month period thereafter to a price per share of C$25.00 if redeemed on or afterDecember 31, 2015.(2) Subject to applicable law and rights of the company, the company may purchase Class AAA preferred shares for cancellation at the lowest price or prices atwhich, in the opinion of the Board of Directors of BPO such shares are obtainable.(3) Subject to the approval of the Toronto Stock Exchange the company may, on or after the dates specified above, convert the Class AAA, Series F, G, H, I, J andK into common shares of the company. The Class AAA, Series F, G, H, I, J and K preferred shares may be converted into that number of common sharesdetermined by dividing the then-applicable redemption price by the greater of C$2.00 (Series G - US$2.00) or 95% of the weighted average trading price ofcommon shares at such time.(4) Subject to the company’s right to redeem or find substitute purchasers, the holder may, on or after the dates specified above, convert Class AAA, SeriesF,G,H, I, J and K preferred shares into that number of common shares determined by dividing the then-applicable redemption price by the greater of C$2.00 (SeriesG - US$2.00) or 95% of the weighted average trading price of common shares at such time.Cumulative preferred dividends are payable quarterly, when declared by the Board of Directors of BPO, on thelast day of March, June, September and December.F-26

NOTE 14: OTHER NON-CURRENT LIABILITIESThe components of the company’s other non-current liabilities are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Other secured debt $ 150 $ 754Deferred gain - 172Other non-current financial liabilities 343 181$ 493 $ 1,107Other secured debt represent obligations of the company’s real estate finance funds which are secured by loansand notes receivable having a carrying value of $0.7 billion (2010 - $1.0 billion). The liabilities are recourse onlyto the assets of the finance subsidiary. The other secured debt is at variable rates with basis in the one-month orthree-month LIBOR averages. As of December 31, 2011, the average weighted rate was 1.3% (2010 – 1.8%).A deferred gain of $172 million was recorded in connection with the reorganization of the U.S. Office Fund inthe second quarter of 2009 and relates to the initial value of the U.S. Office Fund Option assumed by theBusiness at the date of the reorganization as such value was determined pursuant to a valuation methodologyusing unobservable inputs. The gain was recognized in earnings within fair value gains (losses) upon thederecognition of the U.S. Office Fund Option (See Note 20).NOTE 15: INCOME TAXESThe sources of deferred income tax balances are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Non-capital losses (Canada) $ 73 $ 35Capital losses (Canada) 120 132Net operating losses (U.S.) 26 37Difference in basis (947) (759)Total net deferred tax (liability) $ (728) $ (555)The deferred tax balance movements are as follows:(US$ Millions) Recognized in ReclassifiedDec. 31, 2010 Income Equity Other OCI Dec. 31, 2011Deferred tax assets related to non-capital $ 204 $ (8) $ (7) $ - $ 30 $ - $ 219losses and capital lossesDeferred tax liabilities related to(759) (267) 9 16 70 (16) (947)difference in tax and book basis, netNet deferred tax liabilities $ (555) $ (275) $ 2 $ 16 $ 100 $ (16) $ (728)(US$ Millions) Recognized in ReclassifiedDec. 31, 2009 Income Equity Other OCI Dec. 31, 2010Deferred tax assets related to non-capital $ 130 $ 85 $ (19) $ - $ 8 $ - $ 204losses and capital lossesDeferred tax liabilities related to(824) (47) 74 (1) (6) 45 (759)difference in tax and book basis, netNet deferred tax liabilities $ (694) $ 38 $ 55 $ (1) $ 2 $ 45 $ (555)The Business has net operating losses with no expiry of $169 million at December 31, 2011 (2010 - $163million), the benefit of which has not been recognized in these financial statements.F-27

The major components of income tax (expense) benefit include the following:(US$ Millions) 2011 2010 2009Total current income tax $ (164) $ (117) $ (60)Total deferred income tax (275) 39 195Total income tax (expense) benefit $ (439) $ (78) $ 135The company’s effective tax rate is different from the company’s domestic statutory income tax rate due to thedifferences set out below:(US$ Millions) 2011 2010 2009Statutory income tax rate 28% 31% 33%Increase (reduction) in rate resulting from:Portion of income not subject to tax (12) (3) -International operations subject to different tax rates (4) (12) (20)Change in tax rates on temporary differences - - 3Increase in tax basis within flow through joint venture - (7) -Foreign exchange gains and losses - - 1Tax asset previously not recognized - (3) -Other (2) (2) (2)Effective income tax rate 10% 4% 15%The aggregate amount of temporary differences associated with investments in subsidiaries for which deferredtax liabilities have not been recognized as at December 31, 2011 is $3.5 billion (2010 – $2.2 billion).NOTE 16: ACCOUNTS PAYABLE AND OTHER LIABILITIESThe components of the company’s accounts payable and other liabilities are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Accounts payable and accrued liabilities $ 1,094 $ 700Other secured debt 61 -Other liabilities 66 59$ 1,221 $ 759NOTE 17: EQUITY IN NET ASSETSEquity in net assets consists of the following:(US$ Millions) Note Dec. 31, 2011 Dec. 31, 2010Equity in net assets attributable to parent company (a) $ 11,881 $ 7,464Non-controlling interests (b) 9,613 7,680$ 21,494 $ 15,144(a) Equity in net assets attributable to parent companyEquity in net assets attributable to parent company consists of the following:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Equity in net assets $ 11,375 $ 6,593Accumulated other comprehensive income 506 871$ 11,881 $ 7,464F-28

(b) Non-controlling interestsNon-controlling interests consist of the following:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Preferred equity $ 1,190 $ 945Other non-controlling interests 8,423 6,735$ 9,613 $ 7,680(c) Other comprehensive income (loss)Other comprehensive income consists of the following:(US$ Millions) 2011 2010 2009Foreign currency translationUnrealized foreign currency translation (losses) gains in respect of foreign operations $ (363) $ 542 $ 963Losses on hedges of net investments in foreign operations, net of income taxes of $8 million(2010 – $23 million; 2009 – nil) (24) (112) (119)Reclassification to earnings of net foreign exchange losses - - 3(387) 430 847Available-for-sale securitiesChange in unrealized gains (losses) on available-for-sale securities, net of income taxes of $3 million(2010 – nil; 2009 – nil) 4 (9) (25)Reclassification to earnings of (gains) losses on available-for-sale securities, net of income taxes of nil(2010 – $2 million; 2009 – nil) - 7 -4 (2) (25)Cash flow hedgesGains on derivatives designated as cash flow hedges, net of income taxes of $32 million (2010 – $24million; 2009 – $6 million) (260) 95 13Reclassification to earnings of losses on derivatives designated as cash flow hedges, net of income taxesof $1 million (2010 – $5 million; 2009 – nil) 2 (28) 1(258) 67 14Other comprehensive income(loss) $ (641) $ 495 $ 836NOTE 18: REVENUE AND PROPERTY NET OPERATING INCOME(a) RevenueThe components of revenue are as follows:(US$ Millions) 2011 2010 2009Revenue from operations $ 2,589 $ 2,102 $ 1,919Investment and other revenue (1) 231 168 80$ 2,820 $ 2,270 $ 1,999(1) Excludes foreign exchange gains and losses associated with translation of the company’s net foreign currency denominated monetaryassets and expenses associated with fee income.F-29

(b) Property net operating incomeNet operating income represents revenue from operations of consolidated properties less direct operating costs.Direct operating costs include all attributable expenses except interest expense, depreciation and amortization,income taxes and fair value gains (losses). NOI does not have standardized meanings prescribed by IFRS andtherefore may differ from similar metrics used by other companies. The details are as follows:(US$ Millions)Revenue fromoperations2011 2010 2009Operating Property Revenue from Operating Property Revenue from Operatingexpenses NOI operations expenses NOI operations expensesPropertyNOIOffice $ 1,909 $ 793 $ 1,116 $ 1,521 $ 615 $ 906 $ 1,456 $ 610 $ 846Retail 193 55 138 199 69 130 187 85 102Multi-Family andIndustrial 108 62 46 54 32 22 25 12 13OpportunisticInvestments 379 172 207 328 136 192 251 88 163$ 2,589 $ 1,082 $ 1,507 $ 2,102 $ 852 $ 1,250 $ 1,919 $ 795 $ 1,124The Business leases properties under operating leases generally with lease terms of between 1 and 15 years, withoptions to extend up to a further 5 years. Minimum rental commitments on non-cancellable tenant operatingleases are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Not later than 1 year $ 1,577 $ 1,378Later than 1 year and not longer than 5 years 5,854 4,628Later than 5 years 6,248 4,549$ 13,679 $ 10,555Property operating costs for the year ended December 31, 2011 includes $21 million (2010 - $21 million; 2009 -$22 million) representing rent expense associated with operating leases for land on which certain of thecompany’s operating properties are situated. The Business does not have an option to purchase the leased land atthe expiry of the lease periods. Future minimum lease payments under these arrangements are as follows:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Not later than 1 year $ 33 $ 22Later than 1 year and not longer than 5 years 119 81Later than 5 years 1,591 1,095$ 1,743 $ 1,198NOTE 19: INVESTMENT AND OTHER INCOMEThe components of investment and other income are as follows:(US$ Millions) 2011 2010 2009Fee income $ 22 $ 59 $ 17Dividend income 28 28 -Interest income 129 62 38Foreign exchange (2) 11 55Other - (18) (12)$ 177 $ 142 $ 98Fee income is net of $52 million of expenses for the year ended December 31, 2011 (2010 - $37 million; 2009 -$37 million).F-30

NOTE 20: FAIR VALUE GAINS (LOSSES)The components of fair value adjustment are as follows:(US$ Millions) 2011 2010 2009Investment properties $ 993 $ 548 $ (996)Financial instruments 165 17 (53)Other (46) 9 162$ 1,112 $ 574 $ (887)For the year ended December 31, 2009 other includes a $133 million bargain purchase gain, net of transactioncosts of $5 million, in connection with the reorganization of the investors’ interests in the U.S. Office Fund,principally representing the excess of the fair value of the interest in the venture that the Business received underthe reorganization over the deemed cost, which was the carrying amount of the company’s pre-existinginvestment in a subsidiary venture.Included within investment properties are certain items recognized in connection with the exercise of the U.S.Office Fund Option as follows:(US$ Millions)Excess of net assets of TRZ Holdings recognized on assumption of control over the carrying amount of the equity accountedinvestment in the U.S. Office Fund (refer to Note 6) $ 212Carrying amount of U.S. Office Fund Option derecognized (241)Deferred gain realized (refer to Note 14) 172Excess of consideration paid to settle the U.S. Office Fund true-up consideration payable over carrying amount (3)Related tax effects 10Total $ 150NOTE 21: GUARANTEES, CONTINGENCIES AND OTHERIn the normal course of operations, the Business and its consolidated entities execute agreements that provide forindemnification and guarantees to third parties in transactions such as business dispositions, businessacquisitions, sales of assets and sales of services.The company’s operating subsidiaries have also agreed to indemnify its directors and certain of its officers andemployees. The nature of substantially all of the indemnification undertakings prevent the Business from makinga reasonable estimate of the maximum potential amount that it could be required to pay third parties as theagreements do not specify a maximum amount and the amounts are dependent upon the outcome of futurecontingent events, the nature and likelihood of which cannot be determined at this time. Historically, neither theBusiness nor its consolidated subsidiaries have made significant payments under such indemnificationagreements.The Business does not conduct its operations, other than those of equity-accounted investments, through entitiesthat are not fully or proportionately consolidated in these financial statements, and has not guaranteed orotherwise contractually committed to support any material financial obligations not reflected in these financialstatements.The Business and its operating subsidiaries are contingently liable with respect to litigation and claims that arisefrom time to time in the normal course of business or otherwise. A specific litigation is being pursued against oneof the company’s subsidiaries related to security on a defaulted loan. At this time, the amount of contingent cashoutflow related to the litigation and claims currently being pursued against the subsidiary is uncertain and couldbe up to C$42 million in the event the Business is completely unsuccessful in defending the claims.The Business maintains insurance on its properties in amounts and with deductibles that it believes are in linewith what owners of similar properties carry. The Business maintains all risk property insurance and rental valuecoverage (including coverage for the perils of flood, earthquake and named windstorm).F-31

NOTE 22: CAPITAL MANAGEMENT AND LIQUIDITYThe capital of the Business consists of property debt, capital securities, other secured debt and equity.The parent company’s objectives when managing this capital are to maintain an appropriate balance betweenholding a sufficient amount of capital to support its operations and to reduce its weighted average cost of capitaland improve the returns on equity through value enhancement initiatives and the consistent monitoring of thebalance between debt and equity financing of the subsidiaries. As at December 31, 2011, the recorded values ofcapital in the financial statements totaled $38 billion (2010 - $28 billion). Its principal liquidity needs for the nextyear are to:• fund recurring expenses;• meet debt service requirements;• make dividend payments;• fund those capital expenditures deemed mandatory, including tenant improvements;• fund current development costs not covered under construction loans; and• fund investing activities which could include:O discretionary capital expenditures; andO property acquisitions.Most of the company’s borrowings are in the form of long term asset-specific financings with recourse only tothe specific assets. Limiting recourse to specific assets ensures that poor performance within one area does notcompromise the company’s ability to finance the balance of its operations.The company’s operating subsidiaries are subject to limited covenants in respect of their corporate debt and arein full compliance with all such covenants at December 31, 2011. The company’s operating subsidiaries are alsoin compliance with all covenants and other capital requirements related to regulatory or contractual obligations ofmaterial consequence to the company.The parent company’s strategy is to satisfy its liquidity needs in respect of the Business using the company’scash on hand, cashflows generated from operating activities and provided by financing activities, as well asproceeds from asset sales. The operating subsidiaries of the Business also generate liquidity by accessing capitalmarkets on an opportunistic basis.The company’s principal liquidity needs for periods beyond the next year are for scheduled debt maturities,distributions, recurring and non-recurring capital expenditures, development costs and potential propertyacquisitions. The Business plans to meet these needs with one or more of: cashflows from operations;construction loans; creation of new funds; proceeds from sales of assets; proceeds from sale of non-controllinginterests in subsidiaries; and credit facilities and refinancing opportunities.The following table presents the contractual maturities of the company’s financial liabilities at December 31,2011:(US$ Millions)Payments Due By PeriodTotal Less than 1 Year 2 – 3 years 4 – 5 YearsAfter 5YearsProperty and other secured debt $ 15,598 $ 1,433 $ 6,812 $ 2,063 $ 5,290Capital securities 994 150 392 452 -Other financial liabilities 1,170 1,170 - - -Interest expense (1)Property and other secured debt 4,746 984 1,820 1,015 927Capital securities 152 49 72 31 -(1) Represents aggregate interest expense expected to be paid over the term of the obligations. Variable interest rate payments have beencalculated based on current rates.F-32

NOTE 23: FINANCIAL INSTRUMENTS(a) Derivatives and hedging activitiesThe company’s subsidiaries use derivative and non-derivative instruments to manage financial risks, includinginterest rate, commodity, equity price and foreign exchange risks. The use of derivative contracts is governed bydocumented risk management policies and approved limits. The Business does not use derivatives for speculativepurposes. The Business uses the following derivative instruments to manage these risks:• Foreign currency forward contracts to hedge exposures to Canadian dollar, Australian dollar and Britishpound denominated investments in foreign subsidiaries and foreign currency denominated financialassets;• Interest rate swaps to manage interest rate risk associated with planned refinancings and existingvariable rate debt;• Interest rate caps to hedge interest rate risk on certain variable rate debt; and• Total return swaps on BPO’s shares to economically hedge exposure to variability in its share priceunder its deferred share unit plan.The company also designates Canadian Dollar financial liabilities of certain of its operating entities as hedges ofits net investments in its Canadian operations.Interest rate hedgingThe company has derivatives outstanding that are designated as cash flow hedges of variability in interest ratesassociated with forecasted fixed rate financings and existing variable rate debt.As at December 31, 2011, the company had derivatives representing a notional amount of US$1,599 million inplace to fix rates on forecasted fixed rate financings with maturities between 2014 and 2024 at rates between2.6% and 5.2%. As at December 31, 2010, the company had derivatives representing a notional amount of $85million in place to fix rates on forecasted fixed rate financings with a maturity between 2011 and 2021. Thehedged forecasted fixed rate financings are denominated in US$, C$ and A$.As at December 31, 2011, the company had derivatives with a notional amount of US$5,343 million in place tofix rates on existing variable rate debt at between 0.3% and 9.9% for debt maturities between 2012 and 2014. Asat December 31, 2010, the company had derivatives with a notional amount of $2,662 million in place to fix rateson existing variable rate debt at between 0.3% and 10.2% for debt maturities between 2011 and 2016.The fair value of the company’s outstanding interest rate derivative positions as at December 31, 2011 is a loss of$271 million (2010 – gain of $2 million). For the years ended December 31, 2011, and 2010, the amount ofhedge ineffectiveness recorded in interest expense in connection with the company’s interest rate hedgingactivities was not significant.Foreign currency hedgingThe company has derivatives designated as net investment hedges of its investments in foreign subsidiaries. As atDecember 31, 2011, the company had hedged a notional amount of £45 million at £0.64/US$ and A$135 millionat A$0.98/US$ using foreign currency forward contracts maturing between January and March of 2012. As atDecember 31, 2010, the company had designated a notional amount of £45 million at GBP0.64/US$, C$500 atC$1.00/US$ and A$1,100 at A$0.98/US$ using foreign currency contracts maturing in March 2011.The fair value of the company’s outstanding foreign currency forwards as at December 31, 2011 is a loss of $4million (2010 – loss of $64 million).In addition, as of December 31, 2011, the company had designated C$903 million (2010 – C$950 million) ofCanadian dollar financial liabilities as hedges of its net investment in Canadian operations.F-33

Other derivativesThe following other derivatives have been entered into to manage financial risks and have not been designated ashedges for accounting purposes.At December 31, 2011, the company had a total return swap under which it received the return on a notionalamount of 1.2 million BPO common shares in connection with BPO’s deferred share unit plan. The fair value ofthe total return swap at December 31, 2011 was a gain of $2 million (2010 – loss of $19 million) and a loss of$17 million in connection with the total return swap was recognized in general and administrative expense in theyear then ended (2010 – gain of $6 million).At December 31, 2011, the company had foreign exchange contracts outstanding to swap a €83 million notionalamount to British Pounds (2010 – €83 million). The fair value of these contracts as at December 31, 2011 was nil(2010 – nil) and a gain of $4 million was recognized in investment and other income in connection with thesecontracts in the year ended December 31, 2011 (2010 – $4 million).At December 31, 2010, the company had interest rate swaps in place to fix interest rates on a notional amount of$1,789 million of debt at interest rates between 1.4% and 6.8%, maturing in 2011. The company also had aninterest rate swap to fix a notional amount of A$862 million debt at a fixed rate of 5.9% maturing in 2011 andinterest rate caps to cap a notional amount of $691 million LIBOR based debt at between 2.0% and 3.7%maturing in 2011. The fair value of these contracts at December 31, 2010 was a loss of $7 million and $7 millionof gains related to these contracts were recognized in fair value gains (losses) in the year ended December 31,2010.F-34

(b)Measurement and classification of financial instrumentsClassification and measurementThe following table outlines the classification and measurement basis, and related fair value for disclosures, ofthe financial assets and liabilities in the carve-out financial statements:(US$ Millions) Classification Measurement basisDecember 31, 2011 December 31, 2010CarryingCarryingvalue Fair value value Fair valueFinancial AssetsLoans and notes receivable Loans & Receivables Amortized Cost (1) $ 1,758 $ 1,675 $ 2,080 $ 2,033Other non-current assetsSecurities designated as FVTPL FVTPL Fair Value 856 856 698 698Derivative assets FVTPL Fair Value 210 210 507 507Securities designated as AFS AFS Fair Value 194 194 259 259Other receivables Loans & Receivables Amortized Cost 201 201 178 178Accounts receivable and other Loans & Receivables Amortized Cost 796 796 772 772Cash and cash equivalents Loans & Receivables Amortized Cost 749 749 399 399$ 4,764 $ 4,681 $ 4,893 $ 4,846Financial LiabilitiesProperty debt Other Liabilities Amortized Cost (2) $ 15,387 $ 15,765 $ 11,964 $ 12,110Capital securities Other Liabilities Amortized Cost 994 1,054 1,038 1,067Other non-current liabilitiesOther secured debt Other Liabilities Amortized Cost 150 150 754 719Other non-current financialliabilities Other Liabilities Amortized Cost (3) 343 343 181 181Accounts payable and other liabilities Other Liabilities Amortized Cost (4) 1,221 1,221 759 759$ 18,095 $ 18,533 $ 14,696 $ 14,836(1) Includes loans and notes receivable classified as FVTPL and measured at fair value of $138 million (2010 - nil).(2) Includes embedded derivatives classified as FVTPL and measured at fair value of $56 million (2010 - $54 million).(3) Includes embedded derivatives classified as FVTPL and measured at fair value of $83 million (2010 - $142 million).(4) Includes embedded derivatives classified as FVTPL and measured at fair value of $228 million (2010 - nil).Fair value hierarchyThe Business values instruments carried at fair value using quoted market prices, where available. Quoted marketprices represent a Level 1 valuation. When quoted market prices are not available, the Business maximizes theuse of observable inputs within valuation models. When all significant inputs are observable, the valuation isclassified as Level 2. Valuations that require the significant use of unobservable inputs are considered Level 3.F-35

The following table outlines financial assets and liabilities measured at fair value in the carve-out financialstatements and the level of the inputs used to determine those fair values in the context of the hierarchy asdefined above:December 31, 2011 December 31, 2010(US$ Millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 TotalFinancial AssetsOther non-current assetsSecurities designated as FVTPL $ - $ - $ 856 $ 856 $ - $ - $ 698 $ 698Loans receivable designated as FVTPL - - 138 138 - - - -Securities designated as AFS 41 - 153 194 46 - 213 259Derivative assets - - 210 210 - - 507 507$ 41 $ - $ 1,357 $ 1,398 $ 46 $ - $ 1,418 $ 1,464Financial LiabilitiesProperty debt $ - $ - $ 56 $ 56 $ - $ - $ 54 $ 54Other non-current liabilities - 83 - 83 - 9 133 142Accounts payable and other liabilities - 228 - 228 - - - -$ - $ 311 $ 56 $ 367 $ - $ 9 $ 187 $ 196(c) Market riskInterest Rate riskThe Business faces interest rate risk on its variable rate financial assets and liabilities. In addition, there isinterest rate risk associated with the company’s fixed rate debt due to the expected requirement to refinance suchdebt in the year of maturity. The following table outlines the impact on interest expense from continuingoperations of a 100 basis point increase or decrease in interest rates on the company’s variable rate assets andliabilities and fixed rate debt maturing within one year:(US$ Millions) Dec. 31, 2011 Dec. 31, 2010Parent company bridge loan $ - $ 4BPO Corporate revolving facilities 4 -Variable rate property debt 71 47Fixed rate property debt due within one year 3 3Total $ 78 $ 54The Business manages interest rate risk by primarily entering into fixed rate operating property debt andstaggering the maturities of its mortgage portfolio over a 10-year horizon when the market permits. The companyalso makes use of interest rate derivatives to manage interest rate risk on specific variable rate debts and onanticipated refinancing of fixed rate debt.F-36

Foreign currency riskThe Business is structured such that its foreign operations are primarily conducted by entities with a functionalcurrency which is the same as the economic environment in which the operations take place. As a result, the netincome impact of currency risk associated with financial instruments is limited as its financial assets andliabilities are generally denominated in the functional currency of the subsidiary that holds the financialinstrument. However, the Business is exposed to foreign currency risk on the net assets of its foreign currencydenominated operations. The company’s exposures to foreign currencies and the sensitivity of net income andother comprehensive income, on a pre-tax basis, to a 10% change in the exchange rates relative to the US dollaris summarized below:(Millions)December 31, 2011 December 31, 2010 December 31, 2009EquityEquityEquityattributableNet attributableNet attributableto parent OCI Income to parent OCI Income to parent OCINetIncomeCanadian Dollar C$ 935 $ (84) $ - C$ 820 $ (74) $ - C$ 1,032 $ (89) $ -Australian Dollar A$ 2,005 (186) - A$ 1,863 (173) - A$ 1,997 (163) -British Pound £ 641 (90) - £ 482 (69) - £ 255 (37) -Euro € 83 - (10) € 83 - (10) € 83 - (11)Brazilian Real R$ 586 (28) - R$ 265 (14) - R$ 223 (12) -Total $ (388) $ (10) $ (330) $ (10) $ (301) $ (11)Equity price riskThe Business faces equity price risk in connection with a total return swap under which it receives the returns ona notional 1,286,473 of BPO’s common shares. A $1 increase or decrease in BPO’s share price would result in a$1 million gain or loss being recognized in general and administrative expense.The Business also faces equity price risk related to its 22% common equity interest in Canary Wharf Group plc.A $1 increase in Canary Wharf Group plc’s share would result in a $141 million gain being recognized in fairvalue gains.(d) Credit riskThe company’s maximum exposure to credit risk associated with financial assets is equivalent to the carryingvalue of each class of financial assets as separately presented in loans and notes receivable, other non-currentassets, accounts receivables and other, and cash and cash equivalents.Credit risk arises on loans and notes receivables in the event that borrowers default on the repayment to theBusiness. The Business mitigates this risk by attempting to ensure that adequate security has been provided insupport of such loans and notes.Credit risk related to accounts receivable arises from the possibility that tenants may be unable to fulfill theirlease commitments. The Business mitigates this risk through diversification, ensuring that borrowers meetminimum credit quality requirements and by ensuring that its tenant mix is diversified and by limiting itsexposure to any one tenant. The Business maintains a portfolio that is diversified by property type so thatexposure to a business sector is lessened. Currently no one tenant represents more than 10% of operatingproperty revenue.The majority of the company’s trade receivables are collected within 30 days. The balance of accounts receivableand loans and notes receivable past due is not significant.F-37

NOTE 24: RELATED PARTIESIn the normal course of operations, the Business enters into various transactions on market terms with relatedparties, which have been measured at exchange value and are recognized in the financial statements. Thefollowing table summarizes transactions with related parties:(US$ Millions) Year ended Dec. 31,Transactions for the period of 2011 2010 2009Lease revenue $ 2 $ 2 $ 2Interest income 101 71 17Interest expense 41 7 1Management fees paid 30 52 43Management fees received 15 5 -Balances outstanding as at Dec. 31, 2011 Dec. 31, 2010BRPI promissory notes (1) $ 470 $ -Loans receivable designated as FVTPL (2) 138 -Loans and notes receivable (3) 452 1,221Other current receivables (4) 57 13Capitalized interest paid to Brookfield 40 39Property debt payable 64 113Other liabilities (5) 22 476(1) Refer to Note 10 for details of the related put arrangement.(2) Includes senior unsecured note receivable from a subsidiary of Brookfield that matures on December 19, 2014. The principal and interestpayments on the note receivable are based on the returns of a reference debenture which is, in turn, secured by an equity interest in apublicly traded real estate entity based in Australia.(3) The balance includes BPO’s $145 million receivable from Brookfield (refer to Note 9) and BPO’s $200 million loan receivable related toBrookfield’s ownership of BPO’s Class AAA Series E capital securities earning a rate of 108% of bank prime. In 2010, the balance alsoincluded BPO’s $504 million loan receivable in cash collateralized total return swaps entered into with Brookfield bearing interest at aweighted average rate of LIBOR plus 2.9% and BREF’s $262 million loan receivable related to its ownership of Trizec debt bearing aweight average rate of LIBOR plus 2.8%.(4) The 2011 balance includes a $49 million loan receivable from a subsidiary of Brookfield that is due on March 15, 2012 and secured bycommercial office property.(5) In 2010, other liabilities included BPO’s bridge facility payable to Brookfield which matured in November 2011.NOTE 25: SEGMENTED INFORMATIONThe Business has four operating segments which are independently reviewed and managed by the chief operatingdecision maker (“CODM”), who is identified as the company’s chief executive officer. The operating segmentsare office, retail, multi-family and industrial, and opportunistic investments, located in the United States, Canada,Australia, Brazil and Europe.Information on the company’s reportable segments is presented below:The office segment owns and manages commercial office portfolios, located in major financial, energy, resourceand government center cities in the United States, Canada, Australia and Europe. Included in the office segmentis office development which entails developing office properties on a selective basis throughout North America,Australia and Europe in close proximity to the company’s existing properties.The retail segment owns interests in retail shopping centers in the United States, Australia and Brazil. The largestinvestment is a portfolio of U.S. super-regional shopping mall properties held through the company’s economicinterest in GGP.The multi-family and industrial segment currently owns interests in multi-family and industrial propertiesthrough Brookfield’s private funds.The opportunistic investments segment includes interests in Brookfield-sponsored real estate finance andopportunity funds.F-38

The CODM measures and evaluates segment performance based on equity attributable to parent company, netoperating income (“NOI”) and funds from operations (“FFO”). NOI and FFO do not have standardized meaningsprescribed by IFRS and therefore may differ from similar metrics used by other companies. The Business definesthese measures as follows:• NOI means revenues from operations of consolidated properties less direct operating costs; and• FFO: means income, including equity accounted income, before realized gains (losses), fair value gains(losses) (including equity accounted fair value gains (losses)), income tax expense (benefits) and lessnon-controlling interests.The following summary presents segmented financial information for the company’s principal geographic areasof business:(US$ Millions) Total assets Total liabilities Equity attributable to parentDec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010 Dec. 31, 2011 Dec. 31, 2010OfficeUnited States (1) $ 15,741 $ 10,541 $ 7,710 $ 4,456 $ 7,395 $ 5,678Canada (2) 4,718 4,393 2,247 2,042 2,044 2,081Australia (3) 5,186 4,683 2,681 2,529 2,315 2,028Europe 1,515 1,348 557 565 958 783Developments 1,713 1,404 738 530 560 509Unallocated (4) - - 1,375 1,466 (6,735) (5,787)28,873 22,369 15,308 11,588 6,537 5,292RetailUnited States 4,282 1,192 51 1 3,938 980Australia 407 441 185 194 200 247Brazil 2,430 2,412 1,186 1,432 311 159Europe - 315 - 272 - 437,119 4,360 1,422 1,899 4,449 1,429Multi-Family andIndustrial (5) 1,112 1,148 584 625 157 164OpportunisticInvestments (6) 3,213 2,690 1,509 1,311 738 579$ 40,317 $ 30,567 $ 18,823 $ 15,423 $ 11,881 $ 7,4641. Equity attributable to parent is net of non-controlling interests of $636 million (2010 - $407 million).2. Equity attributable to parent is net of non-controlling interests of $427 million (2010 - $270 million).3. Equity attributable to parent is net of non-controlling interests of $190 million (2010 - $126 million).4. Unallocated liabilities include corporate debt and capital securities. Equity attributable to parent includes non-controlling interests.5. Operations primarily in North America.6. Operations primarily in North America with interests in Europe, Australia, and Brazil.F-39

(US$ Millions) Revenue Net operating income Funds from operations2011 2010 2009 2011 2010 2009 2011 2010 2009OfficeUnited States (1) $ 1,124 $ 768 $ 823 $ 561 $ 418 $ 459 $ 435 $ 427 $ 463Canada (2) 525 540 404 259 243 202 213 227 162Australia 438 320 286 264 214 154 134 91 75Europe (3) 49 61 30 32 31 31 20 27 18Unallocated (4) - - - - - - (490) (405) (395)2,136 1,689 1,543 1,116 906 846 312 367 323RetailUnited States - 6 - - - - 206 (11) -Australia 30 39 40 26 24 22 11 11 18Brazil 167 136 112 111 94 67 (8) (3) 3Europe 1 16 26 1 12 13 (1) (2) (2)198 197 178 138 130 102 208 (5) 19Multi-Family and Industrial (5) 108 54 26 46 22 13 (5) 3 8Opportunistic Investments (5) 378 330 252 207 192 163 61 61 41$ 2,820 $ 2,270 $ 1,999 $ 1,507 $ 1,250 $ 1,124 $ 576 $ 426 $ 3911. 2011 funds from operations includes equity accounted income of $172 million (2010 - $232 million; 2009 - $237 million) and is net ofnon-controlling interests of $53 million (2010 - $34 million; 2009 - $22 million).2. 2011 funds from operations is net of non-controlling interests of $23 million (2010 - $16 million; 2009 - $13 million).3. 2011 funds from operations includes a dividend of $16 million from Canary Wharf (2010 - $26 million; 2009 - nil).4. Funds from operations includes unallocated interest expense, operating costs and non-controlling interest.5. Operations primarily in North America.6. Operations primarily in North America with interests in Europe, Australia, and Brazil.The following table provides a reconciliation of total NOI and FFO to income before income taxes and netincome (loss) attributable to parent company for each of the years ended December 31, 2011, 2010, and 2009:2011 2010 2009Net operating income $ 1,507 $ 1,250 $ 1,124Share of equity accounted funds from operations 492 309 249Investment and other income 177 142 982,176 1,701 1,471Interest expense (977) (790) (635)General and administrative expense (84) (88) (131)Depreciation and amortization (20) (21) (16)Non-controlling interests in funds from operations (519) (376) (298)Funds from operations 576 426 391Fair value gains (losses) 1,112 574 (887)Share of equity accounted fair value gains 1,612 561 (710)Realized gains 365 250 39Non-controlling interests in funds from operations 519 376 298Income (loss) before income taxes 4,184 2,187 (869)Income tax (expense) benefit (439) (78) 135Net income (loss) 3,745 2,109 (734)Non-controlling interests (1,422) (1,083) 257Net income (loss) attributable to parent company $ 2,323 $ 1,026 $ (477)F-40

The following summary presents financial information by the company’s principal geographic regions in which itoperates:(US$ Millions) Total revenue Total non-current assets as at2011 2010 2009 Dec. 31, 2011 Dec. 31, 2010United States $ 1,610 $ 1,158 $ 1,101 $ 23,079 $ 13,829Canada 525 540 404 4,714 4,331Australia 468 359 326 6,474 5,717Brazil 167 136 112 2,175 2,280Europe 50 77 56 1,557 1,696$ 2,820 $ 2,270 $ 1,999 $ 37,999 $ 27,853NOTE 26: APPROVAL OF FINANCIAL STATEMENTSThe financial statements were approved by the board of directors and authorized for issue on March 27, 2012.F-41

Schedule III –Supplemental Schedule of Investment Property InformationThe table below presents the number of operating properties, the related fair value, debt and weighted averageyear of acquisition by segment as of December 31, 2011.Number of propertiesFair Value (2)($ millions)Debt (3)($ millions)Weighted Average Yearof Acquisition (1)Office PropertiesUnited States 54 $ 12,911 $ 6,171 2001Canada 28 4,571 1,840 1999Australia 34 3,787 2,416 2007Europe 1 521 442 2003117 21,790 10,869 2002Retail PropertiesBrazil 10 1,850 1,011 2000Australia 8 364 186 200818 2,214 1,197 2001Multi-Family and IndustrialUnited States 9 903 467 20099 903 467 2009Opportunistic InvestmentsUnited States 11 794 336 2007Canada 1 29 20 200612 823 356 2007Total 156 $ 25,730 $ 12,889 2002(1) Weighted against the current fair value of the properties.(2) Excludes development properties with a fair value of $1,864 million in the United States, Australia, Canada, Europe, and Brazil.(3) Excludes debt related to the development properties in the amount of $832 million in United States, Australia and Brazil.F-42

COMMERCIAL PROPERTY OPERATIONS OF BROOKFIELDASSET MANAGEMENT INC.Unaudited condensed carve-out financial statements for the Commercial PropertyOperations of Brookfield Asset Management Inc. as at March 31, 2012and December 31, 2011 and for the three month periods endedMarch 31, 2012 and March 31, 2011F-43

Commercial Property Operations of Brookfield Asset Management Inc.Condensed Carve-out Balance SheetsUnaudited (US$ Millions) Note Mar. 31, 2012 Dec. 31, 2011AssetsNon-current assetsInvestment properties 3 $ 28,138 $ 27,594Equity accounted investments 4 7,466 6,888Other non-current assets 5 2,331 2,532Loans and notes receivable 6 1,096 98539,031 37,999Current assetsLoans and notes receivable 6 548 773Accounts receivable and other 7 773 796Cash and cash equivalents 697 7492,018 2,318Total assets $ 41,049 $ 40,317Liabilities and equity in net assetsNon-current liabilitiesProperty debt 8 $ 14,006 $ 13,978Capital securities 9 862 994Other non-current liabilities 10 288 493Deferred tax liability 11 805 72815,961 16,193Current liabilitiesProperty debt 8 1,260 1,409Accounts payable and other liabilities 12 1,229 1,2212,489 2,630Equity in net assetsEquity in net assets attributable to parent company 13 12,575 11,881Non-controlling interests 13 10,024 9,613Total equity in net assets 22,599 21,494Total liabilities and equity in net assets $ 41,049 $ 40,317See accompanying notes to the condensed carve-out financial statementsF-44

Commercial Property Operations of Brookfield Asset Management Inc.Condensed Carve-out Statements of IncomeUnaudited (US$ Millions) Three months ended Mar. 31, Note 2012 2011Revenue 14 $ 775 $ 603Property net operating income 14 409 318Investment and other income 15 39 33448 351Interest expense 246 215General and administrative expense 21 23Depreciation and amortization 39 6Income before fair value gains, realized gains (losses), share of net earningsfrom equity accounted investments and income taxes 142 107Fair value gains, net 16 287 303Realized gains (losses) 78 (2)Share of net earnings from equity accounted investments 4 442 195Income before income taxes 949 603Income tax expense 11 239 71Net income $ 710 $ 532Net income attributable toParent company $ 383 $ 337Non-controlling interests 327 195$ 710 $ 532See accompanying notes to the condensed carve-out financial statementsF-45

Commercial Property Operations of Brookfield Asset Management Inc.Condensed Carve-out Statements of Comprehensive IncomeUnaudited (US$ Millions) Three months ended Mar. 31, Note 2012 2011Net income $ 710 $ 532Other comprehensive income13 (c)Foreign currency translation 161 91Cash flow hedges 42 (5)Available-for-sale securities 3 2206 88Comprehensive income $ 916 $ 620Comprehensive income attributable toParent companyNet income $ 383 $ 337Other comprehensive income 112 47495 384Non-controlling interestsNet income 327 195Other comprehensive income 94 41421 236Total comprehensive income $ 916 $ 620See accompanying notes to the condensed carve-out financial statementsF-46

Commercial Property Operations of Brookfield Asset Management Inc.Condensed Carve-out Statements of Changes in EquityUnauditedAccumulated Other Comprehensive Income(US$ Millions)Equity in netEquity in netassetsForeign currencytranslationCash flowhedgesAvailable-for-salesecurities Totalassetsattributable toparentcompanyNon-controllinginterestsTotal equityin net assetsBalance as at December 31, 2011 $ 11,375 $ 606 $ (104) $ 4 $ 506 $ 11,881 $ 9,613 $21,494Net income 383 - - - - 383 327 710Other comprehensive income (loss) - 87 22 3 112 112 94 206Contributions 294 - - - - 294 149 443Distributions (95) - - - - (95) (159) (254)Balance as at March 31, 2012 $ 11,957 $ 693 $ (82) $ 7 $ 618 $ 12,575 $ 10,024 $22,599Balance as at December 31, 2010 $ 6,593 $ 824 $ 51 $ (4) $ 871 $ 7,464 $ 7,680 $15,144Net income 337 - - - - 337 195 532Other comprehensive income (loss) - 53 (6) - 47 47 41 88Contributions 2,229 - - - - 2,229 131 2,360Distributions (207) - - - - (207) (272) (479)Balance as at March 31, 2011 $ 8,952 $ 877 $ 45 $ (4) $ 918 $ 9,870 $ 7,775 $17,645See accompanying notes to the condensed carve-out financial statementsF-47

Commercial Property Operations of Brookfield Asset Management Inc.Condensed Carve-out Statements of CashflowUnaudited (US$ Millions) Three months ended Mar. 31, 2012 2011Operating activitiesNet income $ 710 $ 532Share of net earnings from equity accounted investments (442) (195)Fair value gains, net (287) (303)Deferred income taxes 183 45Realized (gains) losses (78) 2Depreciation and amortization 39 6Initial direct leasing costs (4) (1)Working capital and other 90 77211 163Financing activitiesProperty debt, issuance 458 430Property debt, repayments (957) (745)Other secured debt, issuance 324 36Other secured debt, repayments (119) (67)Capital securities redeemed (153) (21)Non-controlling interests, issued 104 115Non-controlling interests, purchased (2) -Non-controlling interests, distributions (155) (134)Contributions from parent company 169 20Distributions to parent company (71) (152)(402) (518)Investing activitiesInvestment properties, proceeds of dispositions 294 406Investment properties, investments - (59)Investment in equity accounted investments (215) (26)Proceeds from sale of investments 99 26Foreign currency hedges of net investments (11) (29)Loans and notes receivables, collected 115 92Loans and notes receivables, advanced (60) -Loan receivable from parent company, collected 108 2Restricted cash and deposits (59) 36Capital expenditures - development and redevelopment (73) (72)Capital expenditures - operating properties (59) (53)139 323Decrease in cash and cash equivalents (52) (32)Cash and cash equivalents, beginning of period 749 399Cash and cash equivalents, end of period $ 697 $ 367See accompanying notes to the condensed carve-out financial statementsF-48

Notes to the Condensed Carve-out Financial StatementsNOTE 1: NATURE AND DESCRIPTION OF THE OPERATIONSThe Commercial Property Operations of Brookfield Asset Management Inc. (“Brookfield” or the “parentcompany”) consist of substantially all of Brookfield’s commercial property operations, including office, retail,multi-family and industrial and opportunistic investments, located in the United States, Canada, Australia, Braziland Europe that have historically been owned and operated, both directly and through its operating entities, byBrookfield (collectively, the “Business” or the “company”). These operations include interests in 124 officeproperties and 182 retail properties. In addition, Brookfield has interests in a multi-family and industrial platformand an 18 million square foot commercial office development pipeline.Brookfield will effect a reorganization so that an interest in the Business is acquired by holding entities, whichwill be owned by a subsidiary of Brookfield Property Partners L.P. (the “partnership”), a newly formed limitedpartnership. Brookfield intends to transfer the Business through a special dividend to holders of its Class Alimited voting shares and Class B limited voting shares of a portion of the partnership’s non-voting limitedpartnership units (the “spin-off’). The partnership’s sole direct investment will be a limited partner interest inBrookfield Property L.P. (the “property partnership”) which will control the Business through holding entities. Itis currently anticipated that immediately following the spin-off, the holders of Class A limited voting shares andClass B limited voting shares will own approximately 10% of the issued and outstanding units of the company ona fully-exchanged basis and Brookfield will hold units of the company and units of the property partnership that,taken together on a fully-exchanged basis represent approximately 90% of the units of the Company. Thepartnership will control the strategic, financial and operating policy decisions of the property partnershippursuant to a voting agreement to be entered into between the partnership and Brookfield. Wholly-ownedsubsidiaries of Brookfield will serve as the general partners for both the partnership and the property partnership.The parent company’s registered head office is Brookfield Place, 181 Bay Street, Suite 300, Toronto, Ontario,M5J 2T3.NOTE 2: SIGNIFICANT ACCOUNTING POLICIESa) Basis of presentationThese interim condensed carve-out financial statements represent a carve-out of the assets, liabilities, revenues,expenses, and cashflows of the Business that will be contributed to the partnership. These interim condensedcarve-out financial statements have been prepared in accordance with International Accounting Standard (“IAS”)34, “Interim Financial Reporting” (“IAS 34”), as issued by the International Accounting Standards Board(“IASB”). Accordingly, certain information and footnote disclosure normally included in annual financialstatements prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by theIASB, have been omitted or condensed.The interim condensed carve-out financial statements have been prepared using the same accounting policies andmethods as those used in the carve-out financial statements for the year ended December 31, 2011, except for theimpact of the adoption of the accounting standard described below. The interim condensed carve-out financialstatements have been presented in U.S. dollars rounded to the nearest million unless otherwise indicated.Due to the inherent limitations of carving out the assets, liabilities, operations and cashflows from larger entities,these financial statements may not necessarily reflect the company’s financial position, results of operations andcashflow for future periods, nor do they reflect the financial position, results of operations and cashflow thatwould have been realized had the Business been a stand-alone entity during the periods presented.These interim condensed carve-out financial statements should be read in conjunction with the carve-outfinancial statements of the Business for the year ended December 31, 2011.F-49

(b) Adoption of Accounting StandardsThe company adopted amendments to IAS 12, “Income Taxes” (“IAS 12”), effective January 1, 2012. Theseamendments are applicable to the measurement of deferred tax liabilities and deferred tax assets whereinvestment property is measured using the fair value model in IAS 40, “Investment Property” (“IAS 40”). Theamendments introduce a rebuttable presumption that, for purposes of determining deferred tax consequencesassociated with temporary differences relating to investment properties, the carrying amount of an investmentproperty is recovered entirely through sale. This presumption is rebutted if the investment property is held withina business model whose objective is to consume substantially all of the economic benefits embodied in theinvestment property over time, rather than through sale. The company has determined that based on its businessmodel, the rebuttable presumption introduced by the amendments to IAS 12 has been overcome and hascontinued to measure deferred taxes on the basis that the carrying amount of investment properties will berecovered through use except where there is a specific plan to sell a property in the foreseeable future. Therefore,the amendments to IAS 12 did not have an impact on the measurement of the company’s deferred tax liabilities.(c) EstimatesThe preparation of financial statements in accordance with IAS 34 requires the use of certain critical accountingestimates. It also requires management to exercise judgment in applying the parent company’s accountingpolicies. The critical accounting estimates and judgments have been set out in Note 2 to the Business’ carve-outfinancial statements for the year ended December 31, 2011.NOTE 3: INVESTMENT PROPERTIES(US$ Millions)OperatingpropertiesMar. 31, 2012 Dec. 31, 2011DevelopmentOperating Developmentproperties Total properties propertiesTotalBalance at beginning of period $ 25,730 $ 1,864 $ 27,594 $ 19,395 $ 1,565 $ 20,960Property acquisitions 53 - 53 6,411 158 6,569Property dispositions (1) (302) - (302) (1,661) - (1,661)Capital expenditures (2) 57 68 125 343 341 684Reclassification of development to operating - - - 166 (166) -Fair value gains (losses) (3) 395 (6) 389 1,374 (15) 1,359Foreign currency translation and other changes 262 17 279 (298) (19) (317)Balance at end of period $ 26,195 $ 1,943 $ 28,138 $ 25,730 $ 1,864 $ 27,594(1) Property dispositions represent fair value at time of sale, or the selling price.(2) Capital expenditures include capitalized borrowing costs of $20 million (2011 - $90 million) and initial direct leasing costs of $4 million(2011 - $37 million).(3) Fair value gains (losses) include realized gains of $78 million (2011 - $365 million).The Business determines the fair value of each operating property based upon, among other things, rental incomefrom current leases and assumptions about rental income from future leases reflecting market conditions at theapplicable balance sheet dates, less future cash outflows in respect of such leases. Fair values are primarilydetermined by discounting the expected future cashflows, generally over a term of 10 years including a terminalvalue based on the application of a capitalization rate to estimated year 11 cashflows. Certain operatingproperties are valued using a direct capitalization approach whereby a capitalization rate is applied to estimatedcurrent year cashflows. Developments properties under active development are also measured using a discountedcashflow model, net of costs to complete, as of the balance sheet date. Development sites in the planning phasesare measured using comparable market values for similar assets. In accordance with its policy, the Businessmeasures its operating properties and development properties using valuations prepared by management. Fromtime to time, the Business obtains valuations of selected operating and development properties prepared byqualified external valuation professionals in connection with financing transactions or pursuant to othercontractual arrangements. These valuations, which are prepared for purposes other than financial reporting andare not necessarily prepared as of the balance sheet date, are taken into consideration by management but do notform the basis for the company’s reported values.F-50

The key valuation metrics for operating properties, including properties accounted for under the equity method,are set out in the following tables:(US$ Millions)Valuation MethodDiscountRateMar. 31, 2012 Dec. 31, 2011Terminal InvestmentTerminalCapitalization Horizon Discount CapitalizationRate (yrs) Rate RateInvestmentHorizon(yrs)OfficeUnited States Discounted Cash Flow 7.5% 6.3% 12 7.5% 6.3% 12Canada Discounted Cash Flow 6.7% 5.9% 11 6.7% 6.2% 11Australia Discounted Cash Flow 9.1% 7.4% 10 9.1% 7.5% 10Europe Direct Capitalization 6.1% (1) n/a n/a 6.1% (1) n/a n/aRetailUnited States Direct Capitalization 5.8% (1) n/a n/a 6.0% (1) n/a n/aAustralia Discounted Cash Flow 9.7% 8.7% 10 9.8% 8.9% 10Brazil Discounted Cash Flow 9.5% 7.3% 10 9.6% 7.3% 10Multi-Family and IndustrialUnited States Discounted Cash Flow 8.5% 8.5% 8 8.6% 8.3% 10Canada Discounted Cash Flow 8.7% 7.4% 10 8.7% 7.7% 10Opportunistic InvestmentsUnited States Discounted Cash Flow 8.6% 7.4% 10 8.2% 8.1% 10(1) The valuation method used is the direct capitalization method. The amounts presented as the discount rate related to the implied overallcapitalization rate. The terminal capitalization rate and investment horizon are not applicable.During the three months ended March 31, 2012, the Business capitalized a total of $68 million (2011 - $341million) of costs related to property developments. Included in this amount is $48 million (2011 - $251 million)of construction and related costs and $20 million (2011 - $90 million) of borrowing costs capitalized. Theweighted average interest rate used for the capitalization of borrowing costs to development properties is 6.1%(2011 - 7.1%).NOTE 4: EQUITY ACCOUNTED INVESTMENTSSummarized financial information in respect of the company’s equity accounted investments is provided below:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Non-current assets $ 45,060 $ 43,861Current assets 1,875 1,595Total assets 46,935 45,456Non-current liabilities 23,057 23,893Current liabilities 316 271Total liabilities 23,373 24,164Net assets 23,562 21,292Company’s share of net assets $ 7,466 $ 6,888(US$ Millions) Three months ended Mar. 31, 2012 2011Revenue $ 1,018 $ 1,328Expenses 839 913Income before fair value gains 179 415Fair value gains 1,334 208Net income 1,513 623Company’s share of net earnings $ 442 $ 195In the three-month period ended March 31, 2012, one of company’s equity accounted investments, GeneralGrowth Properties (“GGP”), completed the spin-off of 30 properties into the newly formed Rouse Properties(“Rouse”), the shares of which were distributed to GGP shareholders. The Business initially recognized theRouse shares received in the spin-off transaction at the carrying amount of its ownership interest in the net assetsF-51

distributed by GGP. The Business subsequently acquired an additional 16.2% interest for $160 million throughits participation in a common equity rights offering by Rouse. Following the spin-off and participation in therights offering, the Business owns an approximately 37% interest in Rouse as at March 31, 2012. The Businessaccounts for its investment in Rouse as an equity accounted investment.The company’s share of net earnings from jointly controlled entities for the three months ended March 31, 2011,includes the following earnings of TRZ Holdings LLC (“TRZ Holdings”) which was a jointly controlled entityprior to the company’s acquisition of control in the third quarter of 2011:(US$ Millions) Three months ended Mar. 31, 2011Revenue $ 204Expenses (146)Earnings before fair value gains 58Fair value gains 120Net earnings $ 178Company’s share of net earnings $ 92NOTE 5: OTHER NON-CURRENT ASSETSThe components of other non-current assets are as follows:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Securities designated as fair value through profit or loss (“FVTPL”) $ 886 $ 856Derivative assets 252 210Securities designated as available-for-sale (“AFS”) 212 194Goodwill 155 150Other non-current assets 826 1,122$ 2,331 $ 2,532NOTE 6: LOANS AND NOTES RECEIVABLELoans and notes receivable reside primarily in the company’s real estate finance funds and are generally securedby commercial and other income producing real property.(US$ Millions) Interest Rate Maturity Date Mar. 31, 2012 Dec. 31, 2011Variable rate LIBOR plus 1.00% to 14.00% 2011 to 2014 $ 970 $ 1,009Fixed rate (1) 0.82% to 8.50% 2014 to 2020 639 715Other Non-Interest Bearing On Demand 35 34$ 1,644 $ 1,758Current 2011 to 2012 $ 548 $ 773Non-current (1) 2013 to 2020 1,096 985$ 1,644 $ 1,758(1) See Note 19 for related party disclosures.NOTE 7: ACCOUNTS RECEIVABLE AND OTHERThe components of accounts receivable and other are as follows:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Accounts receivable (1) $ 165 $ 255Loans receivable designated as FVTPL (1) 143 138Restricted cash 244 185Other current assets 221 218$ 773 $ 796(1) See Note 19 for related party disclosures.F-52

NOTE 8: PROPERTY DEBTProperty debt includes the following:Mar. 31, 2012 Dec. 31, 2011(US$ Millions) Weighted Average Rate Debt Balance Weighted Average Rate Debt BalanceUnsecured FacilitiesBrookfield Office Properties’ revolving facility 2.4% $ 271 2.4% $ 264Brookfield Office Properties’ Canadian revolvingfacility 3.2% 120 3.3% 117Brookfield Office Properties’ Senior Notes 4.3% 199 - -Secured Property DebtFixed rate 6.1% 7,313 5.9% 7,946Variable rate 5.8% 7,363 6.8% 7,0605.8% $ 15,266 $ 15,387Current $ 1,260 $ 1,409Non-current 14,006 13,978$ 15,266 $ 15,387Property debt includes foreign currency denominated debt payable in the functional currencies of the borrowingsubsidiaries. Property debt by currency is as follows:Mar. 31, 2012 Dec. 31, 2011(US$ Millions) US$ Balance Local Currency Balance US$ Balance Local Currency BalanceU.S. dollars $ 8,696 $ 8,696 $ 8,753 $ 8,753Canadian dollars 2,256 C$ 2,250 2,033 C$ 2,078Australian dollars 2,996 A$ 2,896 3,148 A$ 3,085Brazilian reais 863 R$ 1,572 1,011 R$ 1,896British pounds 455 £ 284 442 £ 284$ 15,266 $ 15,387NOTE 9: CAPITAL SECURITIESCapital securities include the following Class AAA preferred shares issued by Brookfield Office Properties:(US$ Millions, except share information)SharesOutstandingCumulativeDividend Rate Mar. 31, 2012 Dec. 31, 2011 (1)Class AAA Series F 8,000,000 6.00% $ 201 $ 196Class AAA Series G 4,400,000 5.25% 110 110Class AAA Series H 8,000,000 5.75% 201 196Class AAA Series I - 5.20% - 150Class AAA Series J 8,000,000 5.00% 201 196Class AAA Series K 6,000,000 5.20% 149 146Total $ 862 $ 994(1) Net of transaction costs of $1 million which are amortized to interest expense over the life of the securities using the effective interest ratemethod.On March 30, 2012, Brookfield Office Properties redeemed all of the outstanding Class AAA Series I shares forcash of C$25.00 per share at their carrying amount.Capital securities includes $752 million (2011 – $884 million) repayable in Canadian dollars of C$750 million(2011 – C$903 million).Cumulative preferred dividends are payable quarterly, when declared by the Board of Directors, on the last dayof March, June, September and December. On May 3, 2012 the Board of Directors of Brookfield OfficeProperties declared quarterly dividends payable for the Class AAA Series F, G, H, J and K preferred shares.F-53

NOTE 10: OTHER NON-CURRENT LIABILITIESThe components of other non-current liabilities are as follows:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Other secured debt $ 111 $ 150Other non-current financial liabilities 177 343$ 288 $ 493NOTE 11: INCOME TAXESThe sources of deferred income tax balances are as follows:(US$ Millions) Mar. 31, 2011 Dec. 31, 2011Non-capital losses (Canada) $ 74 $ 73Capital losses (Canada) 119 120Net operating losses (U.S.) 23 26Difference in basis (1,021) (947)Total net deferred tax liability $ (805) $ (728)The deferred tax balance movements are as follows:(US$ Millions) Recognized in ReclassifiedDec. 31, 2011 Income Equity Other OCI Mar. 31, 2012Deferred tax assets related to non-capital $ 219 $ (12) $ - $ - $ 9 $ - $ 216losses and capital lossesDeferred tax liabilities related to(947) (171) (7) 100 (9) 13 (1,021)difference in tax and book basis, netNet deferred tax liabilities $ (728) $ (183) $ (7) $ 100 $ - $ 13 $ (805)The major components of income tax expense include the following:(US$ Millions) Three months ended Mar. 31, 2012 2011Current income tax $ 56 $ 26Deferred income tax 183 45Income tax expense $ 239 $ 71The company’s effective tax rate is different from the company’s domestic statutory income tax rate due to thedifferences set out below:(US$ Millions) Three months ended Mar. 31, 2012 2011Statutory income tax rate 26% 28%Reduction in rate resulting from:Portion of income not subject to tax (14) (2)International operations subject to different tax rates 13 (13)Other - (1)Effective income tax rate 25% 12%NOTE 12: ACCOUNTS PAYABLE AND OTHER LIABILITIESThe components of accounts payable and other liabilities are as follows:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Accounts payable and accrued liabilities $ 1,065 $ 1,094Other secured debt 30 61Other liabilities 134 66$ 1,229 $ 1,221Accounts payable and accrued liabilities include derivative liabilities associated with the company’s derivativesand hedging activities of $255 million (2011 – $271 million).F-54

NOTE 13: EQUITY IN NET ASSETSEquity in net assets consists of the following:(US$ Millions) Note Mar. 31, 2012 Dec. 31, 2011Equity in net assets attributable to parent company (a) $ 12,575 $ 11,881Non-controlling interests (b) 10,024 9,613$ 22,599 $ 21,494(a) Equity in net assets attributable to parent companyEquity in net assets attributable to parent company consists of the following:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Equity in net assets $ 11,957 $ 11,375Accumulated other comprehensive income 618 506$ 12,575 $ 11,881(b) Non-controlling interestsNon-controlling interests consist of the following:(US$ Millions) Mar. 31, 2012 Dec. 31, 2011Preferred equity $ 1,193 $ 1,190Other non-controlling interests 8,831 8,423$ 10,024 $ 9,613(c) Other comprehensive incomeOther comprehensive income consists of the following:(US$ Millions) Three months ended Mar. 31 , 2012 2011Foreign currency translationUnrealized foreign currency translation gains in respect of foreign operations $ 187 $ 175Losses on hedges of net investments in foreign operations, net of income taxes of nil (2011 – nil) (26) (55)Reclassification to earnings of net foreign exchange gains - (29)161 91Cash flow hedgesGains (losses) on derivatives designated as cash flow hedges, net of income taxes of $4.3 million (2011 –$6.2 million) 40 (5)Reclassification to earnings of losses on derivatives designated as cash flow hedges, net of income taxes of nil and nil 2 -42 (5)Available-for-sale securitiesUnrealized gains on available-for-sale securities, net of income taxes of nil (2011 – nil) 3 2Other comprehensive income $ 206 $ 88NOTE 14: REVENUE AND PROPERTY NET OPERATING INCOME(a) RevenueThe components of revenue are as follows:(US$ Millions) Three months ended Mar. 31, 2012 2011Revenue from operations $ 723 $ 564Investment and other revenue (1) 52 39$ 775 $ 603(1) Excludes foreign exchange gains and losses associated with translation of the company’s net foreign currency denominated monetaryassets and expenses associated with fee income.F-55

(b) Property net operating incomeProperty net operating income (“NOI”) represents revenue from operations of consolidated properties less directoperating costs. Direct operating costs include all expenses attributable to the commercial property operationssuch as property maintenance, utilities, insurance, realty taxes and property administration costs and excludeinterest expense, income taxes, fair value gains (losses) and administrative expenses that do not relate directly tooperations of a commercial property. NOI does not have standardized meanings prescribed by IFRS andtherefore may differ from similar metrics used by other companies. The details are as follows:Three months ended Mar. 31, 2012 2011(US$ Millions)Revenue fromoperationsOperatingexpensesPropertyNOIRevenue fromoperationsOperatingexpensesPropertyNOIOffice $ 572 $ 230 $ 342 $ 409 $ 167 $ 242Retail 42 13 29 46 20 26Multi-Family and Industrial 19 8 11 39 27 12Opportunistic Investments 90 63 27 70 32 38$ 723 $ 314 $ 409 $ 564 $ 246 $ 318NOTE 15: INVESTMENT AND OTHER INCOMEThe components of investment and other income are as follows:(US$ Millions) Three months ended Mar. 31, 2012 2011Fee income $ 3 $ 11Dividend income 10 -Interest income 24 22Foreign exchange (1) 3Other 3 (3)$ 39 $ 33Fee income is net of $12 million of expenses for the three months ended March 31, 2012 (2011 - $9 million).NOTE 16: FAIR VALUE GAINS, NETThe components of fair value gains, net, are as follows:(US$ Millions) Three months ended Mar. 31, 2012 2011Investment properties $ 311 $ 167Financial instruments 5 136Other (29) -$ 287 $ 303Other fair value losses for the three months ended March 31, 2012 relate primarily to the impairment of propertydebt and assets included within other non-current assets.NOTE 17: GUARANTEES, CONTINGENCIES AND OTHERIn the normal course of operations, the Business and its consolidated entities execute agreements that provide forindemnification and guarantees to third parties in transactions such as business dispositions, businessacquisitions, sales of assets and sales of services.NOTE 18: FINANCIAL INSTRUMENTSInterest rate hedgingThe company has derivatives outstanding that are designated as cash flow hedges of variability in interest ratesassociated with forecasted fixed rate financings and existing variable rate debt.F-56

As at March 31, 2012, the company had derivatives representing a notional amount of $1,241 million in place tofix rates on forecasted fixed rate financings with maturities between 2022 and 2024 at rates between 2.6% and4.7%. As at December 31, 2011, the company had derivatives representing a notional amount of $1,599 millionin place to fix rates on forecasted fixed rate financings with a maturity between 2014 and 2024. The hedgedforecasted fixed rate financings are denominated in US$ and C$.As at March 31, 2012, the company had derivatives with a notional amount of $6,139 million in place to fix rateson existing variable rate debt at between 0.3% and 10.4% for debt maturities between 2012 and 2016. As atDecember 31, 2011, the company had derivatives with a notional amount of $5,343 million in place to fix rateson existing variable rate debt at between 0.3% and 9.9% for debt maturities between 2012 and 2016.The fair value of the company’s outstanding interest rate derivative positions as at March 31, 2012 was a loss of$255 million (2011 – loss of $271 million). For the three months ended March 31, 2012 and 2011, the amount ofhedge ineffectiveness recorded in interest expense in connection with the company’s interest rate hedgingactivities was not significant.Foreign currency hedgingThe company has derivatives designated as net investment hedges of its investments in foreign subsidiaries. As atMarch 31, 2012, the company had hedged a notional amount of £45 million at £0.63/US$ and A$135 million atA$0.95/US$ using foreign currency forward contracts maturing between April and June of 2012. As atDecember 31, 2011, the company had hedged a notional amount of £45 million at £0.64/US$ and A$135 millionat A$0.98/US$ using foreign currency forward contracts maturing between January and March of 2012.The fair value of the company’s outstanding foreign currency forwards as at March 31, 2012 was a gain of $3million (2011 – loss of $4 million).In addition, as of March 31, 2012, the company had designated C$750 million (2011 – C$903 million) ofCanadian dollar financial liabilities as hedges of its net investment in Canadian operations.For the three months ended March 31, 2012, the amount of hedge ineffectiveness recorded in earnings inconnection with the company’s foreign currency hedging activities was not significant.Other derivativesThe following other derivatives have been entered into to manage financial risks and have not been designated ashedges for accounting purposes.At March 31, 2012, the company had a total return swap under which it received the return on a notional amountof 1.3 million Brookfield Office Properties common shares in connection with Brookfield Office Properties’deferred share unit plan. The fair value of the total return swap at March 31, 2012 was a gain of $4 million (2011– gain of $2 million) and a gain of $2 million in connection with the total return swap was recognized in generaland administrative expense in the three months then ended (2011 – loss of $17 million).At March 31, 2012, the company had foreign exchange contracts outstanding to swap a €83 million notionalamount to GBP (2011 – €83 million). The fair value of these contracts as at March 31, 2012 was nil (2011 – nil).F-57

NOTE 19: RELATED PARTIESIn the normal course of operations, the company enters into various transactions on market terms with relatedparties, which have been measured at exchange value and are recognized in the financial statements. Thefollowing table summarizes transactions with related parties:(US$ Millions) Three months ended Mar. 31, 2012 2011Lease revenue $ 1 $ 1Interest income 13 18Management fees paid 5 9Balances outstanding as at Mar. 31, 2012 Dec. 31, 2011BRPI promissory notes (1) $ 481 $ 470Loans receivable designated as FVTPL (2) 143 138Loans and notes receivable (3) 382 452Other current receivables 8 57Capitalized interest paid to Brookfield 5 40Property debt payable 30 79Other liabilities 30 22(1) Included in notes receivable is $481 million (2011 - $470 million) related to unsecured promissory notes of C$480 million receivable fromBrookfield Residential Properties Inc. (“BRPI”), a subsidiary of the parent company. Under the terms of a put agreement, the Business hasthe right to put up to $365 million of the promissory notes, at various dates beginning December 31, 2012, to Brookfield for cash proceedsequal to the outstanding principal amount.(2) Includes a senior unsecured note receivable from a subsidiary of Brookfield that matures on December 19, 2014. The principal and interestpayments on the note receivable are based on the returns of a reference debenture which is, in turn, secured by an equity interest in apublicly traded real estate entity based in Australia. The debenture was not repaid on its scheduled maturity date and a default notice wasissued to the borrower demanding full repayment.(3) Includes $147 million receivable from Brookfield upon the earlier of the company’s exercise of its option to convert its participating loaninterests into direct ownership of the Australian portfolio or the maturity of the participating loan notes. Also included is a $200 millionloan receivable related to Brookfield’s ownership of Brookfield Office Properties’ Class AAA Series E capital securities earning a rate of108% of bank prime.NOTE 20: SEGMENTED INFORMATIONThe Business’ four operating segments are office, retail, multi-family and industrial, and opportunisticinvestments, located in the United States, Canada, Australia, Brazil and Europe.The following summary presents segmented financial information for the company’s principal geographic areasof business:(US$ Millions) Total assets Total liabilities Equity attributable to parentMar. 31, 2012 Dec. 31, 2011 Mar. 31, 2012 Dec. 31, 2011 Mar. 31, 2012 Dec. 31, 2011OfficeUnited States (1) $ 15,714 $ 15,741 $ 7,490 $ 7,710 $ 7,588 $ 7,395Canada (2) 4,903 4,718 2,295 2,247 2,149 2,044Australia (3) 5,187 5,186 2,457 2,681 2,533 2,315Europe 1,473 1,515 479 557 994 958Developments 1,817 1,713 799 738 589 560Unallocated (4) - - 1,452 1,375 (6,985) (6,735)29,094 28,873 14,972 15,308 6,868 6,537RetailUnited States 4,866 4,282 182 51 4,272 3,938Australia 380 407 170 185 210 200Brazil 2,337 2,430 1,055 1,186 321 3117,583 7,119 1,407 1,422 4,803 4,449Multi-Family andIndustrial (5) 1,215 1,112 753 584 139 157OpportunisticInvestments (6) 3,157 3,213 1,318 1,509 765 738$ 41,049 $ 40,317 $ 18,450 $ 18,823 $ 12,575 $ 11,8811. Equity attributable to parent is net of non-controlling interests of $636 million (2011 - $636 million).2. Equity attributable to parent is net of non-controlling interests of $459 million (2011 - $427 million).3. Equity attributable to parent is net of non-controlling interests of $197 million (2011 - $190 million).4. Unallocated liabilities include corporate debt and capital securities. Equity attributable to parent includes non-controlling interests.5. Operations primarily in North America.6. Operations primarily in North America with interests in Europe, Australia, and Brazil.F-58

(US$ Millions) Revenue Net operating income Funds from operationsThree months ended Mar. 31, 2012 2011 2012 2011 2012 2011OfficeUnited States (1) $ 342 $ 206 $ 192 $ 106 $ 110 $ 113Canada (2) 141 131 66 64 40 44Australia 117 99 76 64 53 33Europe (3) 17 8 8 8 10 1Unallocated (4) - - - - (117) (116)617 444 342 242 96 75RetailUnited States - 2 - - 49 56Australia 8 8 5 5 2 (2)Brazil 38 38 24 20 (1) (5)Europe - 1 - 1 - 146 49 29 26 50 50Multi-Family and Industrial (5) 19 39 11 12 1 2Opportunistic Investments (6) 93 71 27 38 (6) 9$ 775 $ 603 $ 409 $ 318 $ 141 $ 1361. 2012 funds from operations include equity accounted income of $20 million (2011 - $54 million) and is net of non-controlling interests of$18 million (2011 - $10 million).2. 2012 funds from operations is net of non-controlling interests of $6 million (2011 - $5 million).3. 2012 funds from operations include a dividend of $9 million from Canary Wharf (2011 - nil).4. Funds from operations include unallocated interest expense, operating costs and non-controlling interest.5. Operations primarily in North America.6. Operations primarily in North America with interests in Europe, Australia, and Brazil.The following table provides a reconciliation of total NOI and funds from operations (“FFO”) to income beforeincome taxes and net income attributable to parent company for the three months ended March 31, 2012 and2011:(US$ Millions) Three months ended Mar. 31, 2012 2011Net operating income $ 409 $ 318Share of equity accounted funds from operations 89 138Investment and other income 39 33537 489Interest expense (246) (215)General and administrative expense (21) (23)Depreciation and amortization (39) (6)Non-controlling interests in funds from operations (90) (109)Funds from operations 141 136Fair value gains, net 287 303Share of equity accounted fair value gains 353 57Realized gains (losses) 78 (2)Non-controlling interests in funds from operations 90 109Income before income taxes 949 603Income tax expense (239) (71)Net income 710 532Non-controlling interests (327) (195)Net income attributable to parent company $ 383 $ 337F-59

The following summary presents financial information by the company’s principal geographic regions in which itoperates:(US$ Millions)Total revenue three months endedMar. 31,Total non-current assets as at2012 2011 Mar. 31, 2012 Dec. 31, 2011United States $ 454 $ 318 $ 23,930 $ 23,079Canada 141 131 4,929 4,714Australia 125 107 6,563 6,474Brazil 38 38 2,101 2,175Europe 17 9 1,508 1,557$ 775 $ 603 $ 39,031 $ 37,999NOTE 21: SUBSEQUENT EVENTIn April 2012, one of the company’s real estate finance funds obtained control over an operating resort propertyby foreclosing on a loan receivable. The carrying amount of the loan receivable at March 31, 2012 was $174million.NOTE 22: APPROVAL OF FINANCIAL STATEMENTSThe financial statements were approved by the board of directors and authorized for issue on June 8, 2012.F-60

BROOKFIELD PROPERTY PARTNERS L.P.Balance sheetas at May 31, 2012F-61

Report of Independent Registered Chartered AccountantsTo the Directors ofBrookfield Property Partners L.P.We have audited the accompanying balance sheet of Brookfield Property Partners L.P. (the “Partnership”) as atMay 31, 2012 and a summary of significant accounting policies and other explanatory information.Management’s Responsibility for the Balance SheetManagement is responsible for the preparation and fair presentation of the balance sheet in accordance withInternational Financial Reporting Standards as issued by the International Accounting Standards Board, and forsuch internal control as management determines is necessary to enable the preparation of a balance sheet that isfree from material misstatement, whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on this balance sheet based on our audit. We conducted our audit inaccordance with Canadian generally accepted auditing standards and the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free frommaterial misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thebalance sheet. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the balance sheet, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of the balance sheet inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the balance sheet.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.OpinionIn our opinion, the balance sheet presents fairly, in all material respects, the financial position of the Partnershipas at May 31, 2012, in accordance with International Financial Reporting Standards as issued by the InternationalAccounting Standards Board./s/ Deloitte & Touche LLPIndependent Registered Chartered AccountantsLicensed Public AccountantsToronto, CanadaJune 11, 2012F-62

BROOKFIELD PROPERTY PARTNERS L.P.BALANCE SHEET(all dollar amounts are in U.S. dollars)As atMay 31,2012AssetsInvestment (Note 3) $ 1,000$ 1,000Partners’ capital $ 1,000The accompanying notes are an integral part of these financial statements.$ 1,000F-63

BROOKFIELD PROPERTY PARTNERS L.P.NOTES TO THE BALANCE SHEET1. ORGANIZATIONBrookfield Property Partners L.P. (the “Partnership”) was formed as a limited partnership established underthe laws of Bermuda, pursuant to a limited partnership agreement dated January 3, 2012. The general partnerof the Partnership, Brookfield Property Partners Limited, contributed $100 and Brookfield AssetManagement Inc. (as a limited partner) contributed $900. The Partnership has been established to serve asthe general partner’s primary vehicle to own and operate real property assets on a global basis.The Partnership’s registered head office is 73 Front Street, Hamilton, HM 12, Bermuda.The financial statements were approved by the board of directors and authorized for issue on June 8, 2012.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe balance sheet has been prepared in accordance with International Financial Reporting Standards asissued by the International Accounting Standards Board. Separate Statements of Income, Changes inPartners’ Capital and Cash Flows have not been presented as there have been no activities for this entity.3. INVESTMENTThe Partnership made an initial capital contribution of $1,000 to Brookfield Property L.P. (the “PropertyPartnership”), a limited partnership formed under the laws of Bermuda, in exchange for 1,000 limited partnerunits of the Property Partnership.F-64

BROOKFIELD PROPERTY PARTNERS LIMITEDBalance sheetas at May 31, 2012F-65

Report of Independent Registered Chartered AccountantsTo the Directors ofBrookfield Property Partners LimitedWe have audited the accompanying balance sheet of Brookfield Property Partners Limited (the “Company”) as atMay 31, 2012 and a summary of significant accounting policies and other explanatory information.Management’s Responsibility for the Balance SheetManagement is responsible for the preparation and fair presentation of the balance sheet in accordance withInternational Financial Reporting Standards as issued by the International Accounting Standards Board, and forsuch internal control as management determines is necessary to enable the preparation of a balance sheet that isfree from material misstatement, whether due to fraud or error.Auditor’s ResponsibilityOur responsibility is to express an opinion on this balance sheet based on our audit. We conducted our audit inaccordance with Canadian generally accepted auditing standards and the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the balance sheet is free frommaterial misstatement.An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in thebalance sheet. The procedures selected depend on the auditor’s judgment, including the assessment of the risks ofmaterial misstatement of the balance sheet, whether due to fraud or error. In making those risk assessments, theauditor considers internal control relevant to the entity’s preparation and fair presentation of the balance sheet inorder to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressingan opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimates made bymanagement, as well as evaluating the overall presentation of the balance sheet.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion.OpinionIn our opinion, the balance sheet presents fairly, in all material respects, the financial position of the Company asat May 31, 2012, in accordance with International Financial Reporting Standards as issued by the InternationalAccounting Standards Board./s/ Deloitte & Touche LLPIndependent Registered Chartered AccountantsLicensed Public AccountantsToronto, CanadaJune 11, 2012F-66

BROOKFIELD PROPERTY PARTNERS LIMITEDBALANCE SHEET(all dollar amounts are in U.S. dollars)As atMay 31,2012AssetsCash $ 100$ 100Shareholder’s EquityCommon Shares – unlimited shares authorized, one issued and outstanding $ 100$ 100The accompanying notes are an integral part of these financial statements.F-67

BROOKFIELD PROPERTY PARTNERS LIMITEDNOTES TO THE BALANCE SHEET1. ORGANIZATIONBrookfield Property Partners Limited (the “Company”) was formed as a company under the Companies Act1981 of Bermuda pursuant to a memorandum of association dated December 20, 2011. The Company issuedone share of par value $100 upon incorporation. The Company was incorporated to serve as the generalpartner of Brookfield Property Partners L.P.The Company’s registered head office is 73 Front Street, Hamilton, HM 12, Bermuda.The financial statements were approved by the board of directors and authorized for issue on June 8, 2012.2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe balance sheet has been prepared in accordance with International Financial Reporting Standards asissued by the International Accounting Standards Board. Separate Statements of Income, Changes inShareholder’s Equity and Cash Flows have not been presented as there have been no activities for thisentity.F-68

GENERAL GROWTH PROPERTIES, INC.Consolidated financial statements of General Growth Properties, Inc. as of December 31, 2011 and 2010and for each of the three years in the period ended December 31, 2011** To be filed by amendment.F-69

TRZ HOLDINGS LLC AND SUBSIDIARIESConsolidated financial statements as at December 31, 2011 and 2010 and for each of the yearsin the three-year period ended December 31, 2011F-70

TRZ HOLDINGS LLC AND SUBSIDIARIESIndependent Auditor’s Report F-72Consolidated financial statements of TRZ Holdings LLC and Subsidiaries as of December 31, 2011and December 31, 2010 and for each of the years in the three-year period ended December 31, 2011Balance Sheets F-73Statements of Operations F-74Statements of Comprehensive Income F-75Statements of Changes in Members’ Equity F-76Statements of Cash Flows F-77PageNotes to Consolidated Financial StatementsF-78–93F-71

Independent Auditor’s ReportTo the Members ofTRZ Holdings LLC:We have audited the accompanying consolidated statements of operations, comprehensive income and cash flowsof TRZ Holdings LLC and Subsidiaries (the “Company”) for the year ended December 31, 2009. These financialstatements are the responsibility of the Company’s management. Our responsibility is to express an opinion onthese financial statements based on our audit.We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica. Those standards require that we plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free of material misstatement. An audit includes consideration of internalcontrol over financial reporting as a basis for designing audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internalcontrol over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, ona test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accountingprinciples used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.In our opinion, such consolidated statements of operations, comprehensive income and cash flows present fairly,in all material respects, the results of operations and cash flows of the Company for the year ended December 31,2009, in conformity with accounting principles generally accepted in the United States of America./s/ Deloitte & Touche LLPChartered AccountantsLicensed Public AccountantsToronto, CanadaApril 9, 2010, except as to Note 8 for the year ended December 31, 2009for which the date is March 29, 2012F-72

TRZ HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2011 AND 2010(U.S. dollars in thousands)ASSETSUnaudited2011 2010REAL ESTATE $3,998,464 $5,941,743CASH 261,231 166,678ESCROWS AND RESTRICTED CASH 42,082 24,011INVESTMENT IN UNCONSOLIDATED REAL ESTATE VENTURES 588,418 786,512RECEIVABLES AND OTHER 211,633 176,943DEFERRED CHARGES — Net 143,403 167,847INTANGIBLE ASSETS — Net 154,385 284,598PREPAID EXPENSE AND OTHER ASSETS 17,735 11,902TOTAL ASSETS $5,417,351 $7,560,234LIABILITIESMORTGAGE DEBT AND OTHER LOANS $2,638,007 $5,151,165ACCOUNTS PAYABLE AND OTHER LIABILITIES 157,811 208,224INTANGIBLE LIABILITIES — Net 181,330 268,557TAXES PAYABLE 3,713 20,500Total liabilities 2,980,861 5,648,446CONTINGENCIES (Note 14)MEMBERS’ EQUITY:Members’ equity 2,440,363 1,888,451Accumulated other comprehensive loss (6,887) (31)Total members’ equity of TRZ Holdings LLC 2,433,476 1,888,420NONCONTROLLING INTEREST:Noncontrolling interest — real estate ventures 1,014 3,8148% Series G cumulative redeemable subordinated preferred units 2,000 2,000Redeemable preferred units - 17,554Total noncontrolling interest 3,014 23,368Total members’ equity 2,436,490 1,911,788TOTAL LIABILITIES AND MEMBERS’ EQUITY $5,417,351 $7,560,234See notes to consolidated financial statements.F-73

TRZ HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONSFOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009(U.S. dollars in thousands)Unaudited Unaudited Audited2011 2010 2009 (1)REVENUES:Rentals $ 398,256 $ 458,630 $ 450,193Recoveries from tenants 130,467 148,385 153,367Parking and other 59,020 54,542 49,446Fee income 866 885 885Total revenues 588,609 662,442 653,891EXPENSES:Operating 248,187 266,292 273,887General and administrative 78 - 73Depreciation and amortization 158,733 165,883 180,031Total expenses 406,998 432,175 453,991OPERATING INCOME 181,611 230,267 199,900OTHER EXPENSE:Interest and other expense (7,536) (3,605) (2,793)Interest expense (178,006) (190,804) (180,619)Total other expense (185,542) (194,409) (183,412)INCOME BEFORE GAIN ON SOLD PROPERTY, INCOME TAXES, INCOMEFROM DISCONTINUED OPERATIONS, AND INCOME FROMUNCONSOLIDATED REAL ESTATE VENTURES (3,931) 35,858 16,488GAIN ON SOLD PROPERTY 265,545 35,084 -PROVISION FOR INCOME AND OTHER CORPORATE TAXES — Net (1,980) (18,510) (882)INCOME FROM UNCONSOLIDATED REAL ESTATE VENTURES 21,835 19,052 23,406NET INCOME FROM CONTINUING OPERATIONS 281,469 71,484 39,012NET INCOME FROM DISCONTINUED OPERATIONS 125,950 37,132 34,964NET INCOME 407,419 108,616 73,976NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST 985 1,112 15,222NET INCOME ATTRIBUTABLE TO TRZ HOLDINGS LLC $ 406,434 $ 107,504 $ 58,754See notes to consolidated financial statements.(1) Restated for discontinued operationsF-74

TRZ HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009(U.S. dollars in thousands)Unaudited Unaudited Audited2011 2010 2009NET INCOME $407,419 $108,616 $73,976OTHER COMPREHENSIVE INCOME (LOSS):Unrealized derivative gains (losses): (6,856) 678 (252)Total other comprehensive income (loss) (6,856) 678 (252)NET COMPREHENSIVE INCOME 400,563 109,294 73,724NET COMPREHENSIVE INCOME ATTRIBUTABLE TONONCONTROLLING INTEREST 985 1,112 15,222NET COMPREHENSIVE INCOME ATTRIBUTABLE TO TRZHOLDINGS LLC $399,578 $108,182 $58,502See notes to consolidated financial statements.F-75

TRZ HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN MEMBERS’ EQUITYFOR THE YEARS ENDED DECEMBER 31, 2011 AND 2010(U.S. dollars in thousands)UnauditedMembers’EquityAccumulatedOtherComprehensiveIncome (Loss)NoncontrollingInterestTotalEquityBALANCE — December 31, 2009 $ 1,780,947 $ (709) $ 23,309 $ 1,803,547Contributions - - - -Net income for the year 107,504 - 1,112 108,616Distributions - - (1,053) (1,053)Other comprehensive income - 678 - 678BALANCE — December 31, 2010 1,888,451 (31) 23,368 1,911,788Contributions 2,054,200 - - 2,054,200Net income for the year 406,434 - 985 407,419Transfer of redeemable preferred units(Note 1) - - (17,554) (17,554)Distributions (1,908,722) - (3,785) (1,912,507)Other comprehensive income - (6,856) - (6,856)BALANCE — December 31, 2011 $ 2,440,363 $(6,887) $ 3,014 $ 2,436,490See notes to consolidated financial statements.F-76

TRZ HOLDINGS LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2011, 2010 AND 2009(U.S. dollars in thousands)Unaudited Unaudited Audited2011 2010 2009OPERATING ACTIVITIES:Net income $ 407,419 $ 108,616 $ 73,976Adjustments to reconcile net income to net cash provided by operating activities:Income from unconsolidated real estate ventures (25,989) (22,621) (26,860)Operating distributions from unconsolidated real estate ventures 3,076 5,081 15,124Depreciation and amortization expense 191,915 226,425 244,034Amortization of acquired operating leases to rental revenue — net (50,061) (63,360) (78,981)Gain on sold property (265,545) (35,084) -Gain on sale of discontinued operations (101,032) - -Tenant leasing costs (22,738) (33,145) (17,620)Recognition to earnings of deferred hedge loss and other 31 678 (252)Changes in operating assets and liabilities:Receivables and other (29,751) (31,521) (21,136)Prepaid expense and other assets (9,208) 6,305 (4,871)Accounts payable and other liabilities (25,777) (25,460) (19,164)Taxes payable (16,787) 16,767 (6,627)Net cash provided by operating activities 55,553 152,681 157,623INVESTING ACTIVITIES:Real estate:Tenant improvements and capital expenditures (85,455) (102,610) (68,701)Development expenditures - - (33,794)Proceeds from sold property 717,500 257,250 -Distribution from investments - - 1,848Escrows and restricted cash (21,260) (4,920) 4,778Increase in advances to affiliates (59,166) - -Decrease in advances from affiliates (36,307) - -Unconsolidated real estate ventures:Investments (31,064) (18,575) (1,040)Capital distributions 11,267 7,406 1,268Net cash provided by (used in) investing activities 495,515 138,551 (95,641)FINANCING ACTIVITIES:Mortgage debt and other loans:Increase in mortgage debt and other loans 1,963,000 128,000 56,100Principal repayments (4,420,915) (314,497) (70,060)Financing expenditures (28,957) - (4,619)Contributions of members’ capital 2,054,200 - 6,226Redemption of redeemable preferred units - (1,330) (27,350)Contribution by noncontrolling interest - - 15,299Distributions (23,843) - -Distribution to noncontrolling interest - - (10,745)Net cash used in financing activities (456,515) (187,827) (35,149)NET INCREASE IN CASH 94,553 103,405 26,833CASH — Beginning of year 166,678 63,273 36,440CASH — End of year $ 261,231 $ 166,678 $ 63,273SUPPLEMENTAL CASH FLOW DISCLOSURES — Cash paid during the year for:Interest, inclusive of amounts capitalized $ 173,480 $ 187,425 $187,779Taxes paid — net $ 18,335 $ 4,768 $ 3,819F-77

TRZ HOLDINGS LLC AND SUBSIDIARIESNOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSAS OF DECEMBER 31, 2011 AND 2010 AND FOR THE YEARS ENDED DECEMBER 31, 2011, 2010AND 2010(U.S. dollars in thousands except share and per share amounts)1. ORGANIZATION AND DESCRIPTION OF THE BUSINESSOrganization — TRZ Holdings LLC (“TRZ Holdings” or the “Company”) is a Delaware limited liabilitycompany that was formed on June 5, 2006. The Company, directly or indirectly through one or moresubsidiaries, is principally engaged in owning, managing, leasing and developing office properties. ThroughApril 9, 2009, the Company was approximately 35% directly owned by Brookfield Properties OfficePartners, Inc. (“BPO REIT”) and approximately 65% directly owned by BREP/TZ Holdco L.L.C.(“BREP”). BPO REIT, a Maryland corporation, is an affiliate of Brookfield Office Properties Inc. (formerly,Brookfield Properties Corporation), a publicly traded real estate company (“Brookfield Properties” or“Brookfield”). BREP, a Delaware limited liability company, is an affiliate of The Blackstone Group(“Blackstone”). The Company was formed as a result of the Agreement and Plan of Merger andArrangement Agreement, (the “Merger Agreement” or the “Merger”) announced on June 5, 2006, betweenTrizec Properties, Inc. (“Trizec Properties”), Trizec Holdings Operating LLC (the “Operating Company”),Trizec Canada Inc. and affiliates of Brookfield Properties.On April 9, 2009, BPO REIT exercised its Brookfield acquisition option that resulted in a reorganization ofownership interests in the Company. As a result, TRZ Holdings acquired all of the shares of TRZHoldings II, Inc. (“TRZ Holdings II”), a consolidated subsidiary, and its subsidiary, TRZ Holdings III LLC(“Holdings III”), not previously owned by the Company. Upon BPO REIT exercising the option, EmeraldBlue KFT (“Emerald”), a wholly owned subsidiary of Brookfield, through a series of transactions,transferred its interest in TRZ Holdings II to BPOP Investor, Inc. (“FREIT”), a Maryland corporation andaffiliate of Brookfield. FREIT then exchanged all its ownership interest in TRZ Holdings II and Holdings IIIfor units of the Company. Further, the Company issued notes with a face value of $765,000 to a whollyowned subsidiary of Brookfield. The Brookfield subsidiary subsequently assigned these notes to third partylenders in exchange for notes previously issued to the lenders by the Brookfield subsidiary. The face valueof the notes assigned were of equal value. After reorganization, the Company was approximately 14%directly owned by BPO REIT, approximately 60% directly owned by FREIT and approximately 26%directly owned by BREP (collectively, the “Members”).During the period commencing on January 1, 2011 and ending on September 30, 2011, BREP had an option (the“Call Option”) to cause the Company and its subsidiaries, through a series of transactions, to transfer indirectownership of all of the BREP Properties (as designated under Exhibit B of the amended and Restated LimitedLiability Company Agreement of TRZ Holdings LLC) to BREP in consideration for the exchange of 100% of theClass A Units (the “Units”) held by BREP. On August 9, 2011, BREP partially exercised its Call Option and allBREP Properties were transferred by the Company with the exception of 5670 Wilshire. On September 29, 2011,BREP fully exercised its Call Option causing the Company to transfer the Operating Company and its soleremaining investment 5670 Wilshire to BREP. BREP did not retain any ownership interest in the Companyfollowing the exercise of its Call Option. At the date of transfer, the Operating Company had redeemable preferredunits valued at $17,554 outstanding. The holders of the redeemable preferred units are entitled, when, as and ifauthorized, to cumulative preferred distributions at a 6% fixed rate per annum. The redeemable preferred units areredeemable at the option of the unitholder at any time or from time to time for cash. The Company retained aninterest in the Operating Company after transfer, requiring it to fund all preferred distributions to the redeemablepreferred unitholders but does not expose the Company to any subsequent risk and rewards of ownership.Additionally, the Company has an obligation to fund a portion of future redemptions of the redeemable preferredunits in relation to the non-economic interest. The Company’s liability related to the non-economic interest atDecember 31, 2011 is $12,859, which is included within accounts payable and other liabilities.F-78

On August 4, 2011 and September 9, 2011, Brookfield, through its subsidiaries, initiated a series oftransactions to reorganize the ownership of the Units held indirectly by Brookfield. After this reorganizationand Blackstone fully exercising its Call Option, the Company is approximately 60% directly owned byBPOP Holdco LLC (“Holdco”) and approximately 40% directly owned by BPOP Investor Subsidiary, Inc.(“SubFREIT”). Holdco, a Delaware limited liability company, and SubFREIT, a Maryland corporation, areaffiliates of Brookfield.At December 31, 2011, the Company, through its subsidiaries, had ownership interests in a portfolio of23 consolidated office properties concentrated in the metropolitan areas of four major U.S. cities whichinclude New York, NY, Washington, D.C., Los Angeles, CA, and Houston, TX.At December 31, 2011, the Company also had ownership interests in five unconsolidated real estate ventureproperties comprising approximately 3.3 million square feet (unaudited) of total area.2. SIGNIFICANT ACCOUNTING POLICIESBasis of Presentation — The accompanying consolidated financial statements include the accounts andoperating results of the Company and its subsidiaries. All intercompany transactions have been eliminated.The Company consolidates entities in which it has a direct or indirect controlling voting interest. The equitymethod of accounting is followed for ownership interests in entities which the Company does not have adirect or indirect controlling voting interest, but over which it can exercise significant influence with respectto operations and major decisions. The cost method of accounting is followed for ownership interests inentities when the Company’s ownership percentage is minimal and the Company does not have significantinfluence.Accounting Estimates — The preparation of financial statements in accordance with generally acceptedaccounting principles (“GAAP”) requires management to make estimates and assumptions. These estimatesand assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assetsand liabilities at the date of the financial statements and the reported amounts of revenues and expensesduring the reporting year. Significant estimates and assumptions have been made with respect to useful livesof assets, determination of future cash flows and probabilities in assessing net recoverable amounts and netrealizable value of assets, capitalization of development costs, provision for income taxes, recoverableamounts of receivables and deferred taxes, and initial valuations and related depreciation or amortizationperiods of real estate assets, deferred costs and intangibles, particularly with respect to acquisitions. Actualresults could differ from these and other estimates.Real Estate — Rental properties are recorded at cost, less accumulated depreciation. Depreciation of rentalproperties is calculated using the straight-line method over periods not exceeding a 60-year estimated lifewith an estimated salvage value of 5%, subject to the terms of any respective ground leases. Depreciation isdetermined with reference to each rental property’s carried value, remaining estimated useful life andresidual value. Tenant improvements are deferred and amortized on a straight-line basis over the shorter ofthe economic life of the improvement or the term of the respective lease.Maintenance and repair costs are expensed against operations as incurred. Planned major maintenanceactivities (for example: roof replacement and the replacement of heating, ventilation, air conditioning andother building systems), significant building improvements, replacements and major renovations, all ofwhich improve or extend the useful life of the properties, are capitalized to rental properties and amortizedover their estimated useful lives.Furniture, equipment and certain improvements are depreciated on a straight-line basis over periods of up to10 years.Above and below market leases are amortized and recorded as either an increase (in the case of belowmarket leases) or a decrease (in the case of above market leases) to rental income over the remaining term ofF-79

the associated lease and any contractual bargain renewal options to the tenant and in place at the time ofpurchase. The value associated with tenant relationships is amortized into depreciation and amortizationexpense over the expected term of the relationship, which includes an estimate of probability of the leaserenewal, and its estimated term. If a tenant vacates its space prior to the contractual termination of the leaseand no rental payments are to be made on the lease, any unamortized balance of the related intangible willbe written off to amortization expense. Tenant improvements, in-place lease value and lease originationcosts are amortized as an expense over the remaining life of the lease (or charged against earnings if thelease is terminated prior to its contractual expiration date).Properties under development consist of rental properties under construction and are recorded at cost,reduced for impairment losses where appropriate. Properties are classified as under development until theproperty is substantially completed and available for occupancy, at which time such properties are classifiedas rental properties and depreciation commences. The cost of properties under development includes costsincurred in connection with their acquisition, development and construction. Such costs consist of all directcosts including capitalized interest on general and specific debt and other direct expenses. Ancillary incomerelating specifically to such properties during the development period is treated as a reduction of costs.If events or circumstances indicate that the carrying value of a rental property, a rental property underdevelopment, or a property held for development may be impaired, a recoverability analysis is performedbased on estimated undiscounted future cash flows to be generated from property operations and itsprojected disposition. If the analysis indicates that the carrying value is not recoverable from such futurecash flows, the property is written down to estimated fair value and an impairment loss is recognized.In accordance with Accounting Standards Codification (“ASC”) Subtopic 360-10-15, Property, Plant andEquipment, properties formerly held for disposition are carried at the lower of their carrying values (i.e.,cost less accumulated depreciation and any impairment loss recognized, where applicable) or estimated fairvalues less costs to sell. Estimated fair value is determined based on management’s estimate of amounts thatwould be realized if the property were offered for sale in the ordinary course of business assuming areasonable sales period and under normal market conditions. Carrying values are reassessed at each balancesheet date. Implicit in management’s assessment of fair values are estimates of future rental and otherincome levels for the properties and their estimated disposal dates. Due to the significant uncertainty indetermining fair value, actual proceeds realized on the ultimate sale of these properties will differ fromestimates and such differences could be material. Depreciation ceases once a property is classified as heldfor disposition.Revenue Recognition — The Company has retained substantially all of the benefits and risks of ownershipof its rental properties and, therefore, accounts for leases with its tenants as operating leases. Revenuesinclude minimum rents and recoveries of operating expenses and property taxes. Recoveries of operatingexpenses and property taxes are recognized in the period the expenses are incurred.The Company reports minimum rental revenue on a straight-line basis, whereby the known amount of cashto be received under a lease is recognized in income evenly over the term of the respective lease.Differences between rental revenue and minimum rents collected in accordance with the lease agreementsare recorded as deferred rent receivables. The impact of the straight-line adjustment increased rental revenueby approximately $19,711, $24,450, and $27,819 for the years ended December 31, 2011, 2010, and 2009respectively.Certain tenants are required to pay overage rents based on sales over a stated base amount during the leaseyear. The Company recognizes overage rents only when each tenant’s actual sales exceed the stated baseamount.Parking and other revenue includes income from public parking spaces, parking spaces leased to tenants,income from tenants for additional services provided by the Company and income from tenants for earlylease termination.F-80

Revenue is recognized on payments received from tenants for early lease terminations on a straight linebasis over the remaining term the tenant occupies the space.The Company provides an allowance for doubtful accounts on a specific identification basis representingthat portion of tenant, other and deferred rent receivables which are estimated to be uncollectible. Suchallowances are reviewed periodically based upon the recovery experience of the Company.The Company recognizes property sales in accordance with ASC Subtopic 360-20, Property, Plant andEquipment — Real Estate Sales. The Company generally records the sales of operating properties using thefull accrual method at closing when the earnings process is deemed to be complete. Sales not qualifying forfull recognition at the time of sale are accounted for under other appropriate deferral methods.Investments — Investments in ventures in which the Company does not have a controlling direct or indirectvoting interest, but over which it can exercise significant influence with respect to its operations and majordecisions, are accounted for using the equity method of accounting whereby the cost of an investment isadjusted for the Company’s share of equity in net income or loss from the date of acquisition and reduced bydistributions received and increased for contributions made. The income or loss of each entity is allocated inaccordance with the provision of the applicable operating agreements. The allocation provisions in theseagreements may differ from the ownership interest held by each investor. Differences between the carryingamount of the Company’s investment in the respective entities and the Company’s share of the underlyingequity of such unconsolidated entities are amortized over the respective lives of the underlying assets, asapplicable.Investments which do not provide the Company with the ability to exert significant influence are accountedfor using the cost method of accounting. Income is recognized only to the extent of dividends or cashreceived.The carrying value of investments which the Company determines to have an impairment considered to beother than temporary is written down to their fair value.Marketable equity securities are accounted for in accordance with ASC Subtopic 320-10-15, Debt andEquity Securities. Unrealized gains and losses on marketable equity securities that are designated asavailable-for-sale are included in accumulated other comprehensive income (loss).Income Taxes — The Company is a partnership for U.S. tax purposes and therefore is generally not subjectto federal and state income taxes.As a result, no provision has been made in the consolidated financial statements for federal income taxes forthe year, except as noted below in respect of TRZ Holdings’ taxable Corporate Subsidiaries.Taxable income from Corporate Subsidiaries is subject to federal, state and local income taxes. During theyear, the Corporate Subsidiaries recorded a tax recovery of $207 ($48 recovery in 2010, $1,017 expense in2009). The Corporate Subsidiaries deferred income taxes, where applicable, are accounted for using theasset and liability method. Under this method, deferred income taxes are recognized for temporarydifferences between the financial reporting bases of assets and liabilities and their respective tax bases andfor operating loss and tax credit carryforwards based on enacted tax rates expected to be in effect when suchamounts are realized or settled. However, deferred tax assets are recognized only to the extent that it is morelikely than not that they will be realized based on consideration of available evidence, including taxplanning strategies and other factors. In addition, for the years ended December 31, 2011 and 2010, theseCorporate Subsidiaries had net operating loss carryforward balances of $7,663 and $6,175, respectively.A portion of the Corporate Subsidiaries’ net operating loss carryforwards may be subject to limitation underthe Internal Revenue Code Section 382. A valuation allowance fully offsets the net operating losscarryforward and, as a result, no deferred tax assets have been established.F-81

Accounting for Uncertain Tax Positions — In accordance with ASC Subtopic 740-10-15, Income Taxes(“ASC 740-10-15”), ASC 740-10-15 addresses the determination of whether tax benefits claimed orexpected to be claimed on a tax return should be recorded in the financial statements. UnderASC 740-10-15, the Company may recognize the tax benefit from an uncertain tax position only if it is morelikely than not that the tax position will be sustained on examination by the taxing authorities, based on thetechnical merits of the position. The tax benefits recognized in the financial statements from such a positionshould be measured based on the maximum benefits that have a greater than 50% likelihood of beingrealized upon ultimate settlement. ASC 740-10-15 also provides guidance on derecognition, classification,interest and penalties on income taxes, accounting in the interim periods and requires increased disclosures.The Company adopted the provisions of ASC 740-10-15 on January 1, 2007. There was no cumulativeeffect adjustment to retained earnings related to adoption.Cash — Cash consists of currency on hand.Escrows and Restricted Cash — Escrows consist primarily of amounts held by lenders to provide forfuture property tax expenditures and tenant improvements. Restricted cash represents amounts committedfor various utility deposits, security deposits and insurance reserves. Certain of these amounts may bereduced upon the fulfillment of specific obligations.Deferred Charges — Deferred charges include deferred finance and leasing costs. Costs incurred to obtainfinancing are capitalized and amortized into interest expense using the effective interest method over theterm of the related debt.All direct and indirect leasing costs are capitalized and amortized on a straight-line basis over the term ofthe related lease. Unamortized costs are charged to amortization expense upon the early termination of therelated lease.Derivative Instruments — The Company uses interest rate swap contracts, forward-starting swap contractsand interest rate cap contracts to manage risk from fluctuations in interest rates as well as to hedgeanticipated future financing transactions. Interest rate swaps involve the receipt of variable-rate amounts inexchange for fixed-rate payments over the life of the agreements without exchange of the underlyingprincipal amount. Forward-starting swap contracts lock in a maximum interest rate on anticipated futurefinancing transactions. Interest rate caps involve the receipt of variable-rate amounts beyond a specifiedstrike price over the life of the agreements without exchange of the underlying principal amount. TheCompany believes these agreements are with counter-parties who are creditworthy financial institutions.The Company adheres to the provisions of ASC Subtopic 815-10-15, Derivatives and Hedging(“ASC 815-10-15”). ASC 815-10-15 establishes accounting and reporting standards for derivativeinstruments, including certain derivative instruments embedded in other contracts, and for hedgingactivities. It requires the recognition of all derivative instruments as assets or liabilities in the Company’sconsolidated balance sheets at fair value. Changes in the fair values of derivative instruments that are notdesignated as hedges, or that do not meet the hedge accounting criteria in ASC 815-10-15, are required to bereported through the statements of operations.For derivatives designated as qualifying cash flow hedges, the effective portion of changes in fair value ofthe derivatives is initially recognized in other comprehensive income and, subsequently, reclassified toearnings when the forecasted transactions occur, and the ineffective portions are recognized directly in thestatements of operations. The Company assesses the effectiveness of each hedging relationship bycomparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows ofthe designated hedged item or transaction. For derivatives not designated as hedges, changes in fair valueare recognized in earnings. The Company does not use derivatives for trading or speculative purposes.F-82

Fair Value of Financial Instruments — The estimated fair value of mortgage debt and other loansdisclosed in the accompanying notes is based on the values derived using market interest rates of similarinstruments. In determining estimates of the fair value of financial instruments, the Company must makeassumptions regarding current market interest rates, considering the term of the instrument and its risk.Current market interest rates are generally selected from a range of potentially acceptable rates and,accordingly, other effective rates and/or fair values are possible.The carrying amounts of cash, escrows and restricted cash, receivables and other assets, accounts payableand other liabilities approximate their fair value due to the short maturities of these financial instruments.New Accounting Pronouncements — Changes to accounting principles generally accepted in the UnitedStates of America (“U.S. GAAP”) are established by the Financial Accounting Standards Board (“FASB”)in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.In May 2011, the FASB issued ASU No. 2011-04, which updated the guidance in ASC Topic 820, FairValue Measurement. The amendments in this Update generally represent clarifications of Topic 820, butalso include some instances where a particular principle or requirement for measuring fair value ordisclosing information about fair value measurements has changed. This Update results in commonprinciples and requirements for measuring fair value and for disclosing information about fair valuemeasurements in accordance with U.S. GAAP and International Financial Reporting Standards. Theamendments in this Update are to be applied prospectively. The amendments are effective for the Companybeginning January 1, 2012. The adoption of this guidance is not expected to have a material impact on theconsolidated financial statements and notes.In June 2011, the FASB issued ASU No. 2011-05, which updated the guidance in ASC Topic 220,Comprehensive Income. Under the amendments in this Update, an entity has the option to present the totalof comprehensive income, the components of net income, and the components of other comprehensiveincome either in a single continuous statement of comprehensive income or in two separate but consecutivestatements. In both choices, an entity is required to present each component of net income along with totalnet income, each component of other comprehensive income along with a total for other comprehensiveincome, and a total amount for comprehensive income. This Update eliminates the option to present thecomponents of other comprehensive income as part of the statement of changes in stockholders’ equity. Theamendments required by this Update do not change the items that must be reported in other comprehensiveincome or when an item of other comprehensive income must be reclassified to net income. Theamendments required by this Update will be applied retrospectively. The amendments are effective for theCompany beginning January 1, 2012.In December, 2011, the FASB issued ASU No. 2011-12, which defers only those provisions withinASU 2011-05 pertaining to reclassification adjustments out of accumulated other comprehensive income.This guidance, except for those provisions deferred by ASU 2011-12, will become effective for fiscal yearsending December 15, 2012. The adoption of this guidance is not expected to have a material impact on theconsolidated financial statements and notes.F-83

3. REAL ESTATEThe Company’s investment in real estate is comprised of:2011 2010Properties:Income producing properties — net $3,941,064 $5,886,028Development properties 57,400 55,715$3,998,464 $5,941,7432011 2010Properties — income producing properties:Land $1,057,213 $1,380,919Buildings and improvements 3,451,721 5,014,5054,508,934 6,395,424Less accumulated depreciation (567,870) (509,396)Income producing properties — net $3,941,064 $5,886,0282011 2010Properties — development propertiesLand $ 47,224 $ 47,224Buildings and improvements 10,176 8,491Properties under development $ 57,400 $ 55,715Ground Lease Obligations — Properties carried at a net book value of approximately $nil and $336,140 atDecember 31, 2011 and 2010, respectively, are situated on land subject to lease agreements expiring in theyears 2069 to 2089. Ground lease expense was recorded on a straight-line basis over the non-cancelablelease period. All ground lease obligations of the Company were related to the BREP Properties and wereassumed by BREP upon exercise of its Call Option.Future Minimum Rents — Future minimum rentals, excluding operating expense recoveries, to bereceived under noncancelable tenant leases in effect at December 31, 2011, for each of the next five years,are as follows:Years EndingDecember 312012 $ 305,1002013 622,0162014 584,2862015 519,5732016 444,484$2,475,459F-84

4. UNCONSOLIDATED REAL ESTATE VENTURESThe Company participates in unconsolidated real estate ventures in various operating properties which areaccounted for using the equity method.The following is a summary of the Company’s ownership in unconsolidated real estate ventures atDecember 31, 2011 and 2010:EntityProperty and LocationLegalInterest (1)Marina Airport Building, Ltd. Marina Towers, Los Angeles, CA 50%Dresser Cullen Venture Kellogg, Brown & Root Tower, Houston, TX 501114 TrizecHahn-Swig, L.L.C. The Grace Building, New York, NY 501411 TrizecHahn-Swig, L.L.C. (2) 1411 Broadway, New York, NY 501460 Leasehold TrizecHahn Swig L.L.C./1460 Fee TrizecHahn Swig L.L.C. (2) 1460 Broadway, New York, NY 50Waterview Investor, L.P. Waterview Development, Arlington, VA 25750 Ninth Street Parent, L.L.C. Victor Building, Washington, D.C. 50(1) The amounts shown approximate the Company’s economic ownership interest as of December 31,2011 and 2010. Cash flows from operations, capital transactions and net income are allocated to theventure partners in accordance with their respective operating agreements. The Company’s share ofthese items is subject to change based on, among other things, the operations of the property and thetiming and amount of capital transactions.(2) This entity was transferred to BREP on August 9,2011, following the exercise by BREP of its CallOption. At December 31, 2010, the Company’s interest in the entity was 50%.Unconsolidated Real Estate Venture Financial Information — The following represents combinedsummarized financial information of the Company’s unconsolidated real estate ventures.Balance Sheet Information 2011 2010Assets:Real estate — net $317,535 $ 370,795Other assets 180,800 192,205Total assets $498,335 $ 563,000Liabilities:Mortgage debt and other loans $512,791 $ 751,603Other liabilities 19,595 53,948Partners’ deficit (34,051) (242,551)Total liabilities and deficit $498,335 $ 563,000Company’s share of deficit $ (30,291) $(135,637)Net excess of cost of investments over the net book value of underlying netassets 618,709 922,149Carrying value of Company’s investment in unconsolidated real estateventures $588,418 $ 786,512F-85

Statement of Operations InformationUnaudited2011Unaudited2010Audited2009Total revenues $141,310 $139,339 $136,653Expenses:Operating and other 59,433 60,743 58,120Depreciation and amortization 16,920 17,531 16,340Total expenses 76,353 78,274 74,460Other income (expense):Interest and other income 2,361 632 5,601Interest expense (30,878) (30,878) (31,240)Total other income (expense) (28,517) (30,246) (25,639)Net income $ 36,440 $ 30,819 $ 36,554Company’s share of net income $ 18,085 $ 15,807 $ 16,725Amortization of net excess of cost of investments over bookvalue of underlying assets 3,750 3,245 6,681Income from unconsolidated real estate ventures $ 21,835 $ 19,052 $ 23,406Contributions, Advances and Distributions — During the years ended December 31, 2011, 2010 and2009, the Company made cash contributions to its unconsolidated real estate ventures of $31,064, $18,575and $1,040, respectively. The Company received distributions from its unconsolidated real estate ventures inthe aggregate amount of approximately $14,343, $12,487 and $16,392 as of December 31, 2011, 2010 and2009, respectively.Certain of the Company’s real estate venture agreements include provisions whereby, at certain specifiedtimes, each party has the right to initiate a purchase or sale of its interest in the ventures at an agreed uponfair value. Under these provisions, the Company is not obligated to purchase the interest of its outsideventure partners.5. CONSOLIDATED REAL ESTATE VENTURESAlthough the financial condition and results of operations of the following real estate ventures areconsolidated, there are unaffiliated parties that own an interest in these real estate ventures. The Companyconsolidates these real estate ventures because it owns at least 50% of the respective ownership entities andcontrols major decisions. The following is a summary of the Company’s ownership in consolidated realestate ventures at December 31, 2011 and 2010:EntityProperty and LocationEconomicInterest (1)TrizecHahn 1065 Avenue of theAmericas L.L.C. (2) 1065 Avenue of the Americas, New York, NY 99%Trizec 2001 M Street Holdings L.L.C. 2001 M Street, Washington, D.C. 98F-86

(1) The amounts shown above approximate the Company’s economic ownership interest as of December 31,2011 and 2010. Cash flows from operations, capital transactions and net income are allocated to theventure partners in accordance with their respective operating agreements. The Company’s share of theseitems is subject to change based on, among other things, the operations of the property and the timing andamount of capital transactions.(2) This entity was transferred to BREP on August 9, 2011 following the exercise by BREP of its CallOption. At December 31, 2010, the Company’s interest in the entity was 99%.6. DEFERRED CHARGESDeferred charges consist of the following:2011 2010Leasing costs $216,214 $241,259Financing costs 23,830 6,109240,044 247,368Less accumulated amortization (96,641) (79,521)$143,403 $167,8477. INTANGIBLE ASSETS AND LIABILITIESThe following table summarizes the intangible assets and liabilities at December 31, 2011 and 2010:2011 2010Intangible assets:In-place lease value $ 106,714 $ 130,534Above market lease value 18,822 18,048Tenant relationship value 246,487 318,192Below market ground lease 152 23,084372,175 489,858Accumulated amortization — in-place lease value (82,454) (88,640)Accumulated amortization — above market lease value (15,310) (12,978)Accumulated amortization — tenant relationship value (119,874) (101,850)Accumulated amortization — below market ground lease (152) (1,792)$ 154,385 $ 284,598Intangible liabilities — below market lease value $ 414,044 $ 565,536Accumulated amortization — below market lease value (232,714) (296,979)$ 181,330 $ 268,557F-87

Future amortization of these intangible assets and liabilities is anticipated to increase (decrease) net incomefor each of the next five years and thereafter, by the following:Years EndingDecember 312012 $ 9,9342013 9,4922014 8,9272015 (9,719)2016 10,050Thereafter (1,739)$26,9458. DISCONTINUED OPERATIONSThe transfer of the BREP Properties in redemption of the BREP Units was accounted for at fair value as anon-pro-rata distribution in accordance with ASC Sub-Topic 845-30-12, Nonmonetary Transactions,resulting in an adjustment to record the transferred properties at fair value of $101,032. The operatingresults of the BREP Properties are presented separately in discontinued operations in the consolidatedstatements of operations.Unaudited Unaudited AuditedStatement of Operations Information2011 2010 2009Total revenues $ 97,792 $170,031 $174,221Expenses:Operating and other 42,704 74,234 75,959Depreciation and amortization 33,182 60,499 64,003Total expenses 75,886 134,733 139,962Other income (expense):Interest expense (1,141) (1,735) (2,749)Fair value adjustment 101,032 - -Total other income (expense) 99,891 (1,735) (2,749)Income from unconsolidated real estate ventures 4,153 3,569 3,454Net income from discontinued operations $125,950 $ 37,132 $ 34,964F-88

9. MORTGAGE DEBT AND OTHER LOANSThe following table sets forth information concerning mortgage debt and other loans as of December 31,2011 and 2010. The economic interest of the Company is 100% unless otherwise noted.Property (Ownership) F/V (1) DateMaturityDecember 31, 2011RatePrincipalBalance2011PrincipalBalance2010CMBS Transaction (2) :Class A-4 F May 2011 $ - $ 131,605Class B-4 F May 2011 - 47,000Class C-4 F May 2011 - 45,600Class D-4 F May 2011 - 40,700Class E-4 F May 2011 - 32,300- 297,205Ernst & Young Plaza F February 2014 5.07% 104,197 106,797One New York Plaza F March 2016 5.50% 378,782 386,9312000 L Street, N.W. V April 2014 - 53,1002001 M Street (98%) (4) F December 2014 5.25% 43,278 43,905Bethesda Crescent F April 2011 - 31,519Two Ballston Plaza F April 2011 - 24,213Bank of America Plaza (Los Angeles) F September 2014 5.31% 223,175 227,187Four Allen Center F October 2013 - 240,0005670 Wilshire (5) V May 2013 - 58,480Reston Crescent V December 2015 1.99% 75,000 75,0001250 Connecticut F January 2016 5.86% 52,424 52,9451200 K Street F February 2021 5.88% 136,630 -1400 K Street F February 2018 5.30% 53,398 -Bethesda Crescent F February 2021 5.58% 61,285 -1550 & 1560 Wilson Blvd V January 2014 2.27% 70,000 -2401 Pennsylvania Avenue V May 2014 4.39% 30,000 -Two Ballston Plaza F May 2014 4.39% 45,198 -Sunrise Tech Park I-IV F May 2014 4.39% 29,708 -2000 L Street F August 2014 2.14% 100,000 -Silver SM Co. LLC F September 2014 2.34% 104,000 -601 Figueroa F May 2014 4.39% 197,627 -Landmark Square F May 2014 4.39% 65,026 -500 Jefferson F May 2014 4.39% 20,400 -Continental Center I F May 2014 4.39% 143,439 -Continental Center II F May 2014 4.39% 27,476 -1 Allen Center F May 2014 4.39% 121,126 -2 Allen Center F May 2018 6.45% 198,847 -3 Allen Center F May 2016 6.12% 163,972 -RBC Mezz V January 2015 5.80% 200,000 -TRZ Holdings JV CMBS Loan V October 2011 - 559,217DB term loan V September 2011 - 78,700Mezzanine loan V October 2011 - 2,919,518Subtotal consolidated debt 4.82% (3) 2,644,988 5,154,717Premium — net (6,981) (3,552)Total consolidated debt $ 2,638,007 $ 5,151,165(1) “F” refers to fixed rate debt, “V” refers to variable rate debt. References to “V” represent the underlying loan, some of which havebeen fixed through hedging instruments.(2) The Company’s Commercial Mortgage Backed Securities (CMBS) loan was cross-collateralized and subject to cross-default withthe properties included in the loan.(3) Represents weighted average at December 31, 2011.(4) Represents a consolidated entity.(5) This floating rate debt has been capped at a 9.15% fixed rate.F-89

Collateralized Property Loans — Property loans are collateralized by deeds of trust or mortgages onproperties and mature at various dates between May 2014 and February 2021.Principal repayments of debt outstanding at December 31, 2011, for each of the next five years, andthereafter, are due as follows:Years EndingDecember 31CollateralizedPropertyLoansOtherLoansTotal2012 $ 20,733 $ - $ 20,7332013 22,316 - 22,3162014 1,327,045 - 1,327,0452015 94,011 200,000 294,0112016 564,917 - 564,917Thereafter 408,985 - 408,985$2,438,007 $200,000 $2,638,007The fair value of commercial property debt is determined by discounting contractual principal and interestpayments at estimated current market interest rates for the instrument. Current market interest rates aredetermined with reference to current benchmark rates for a similar term and current credit spreads for debtwith similar terms and risk. As of December 31, 2011 and 2010, the book value of commercial property debtexceeds the fair value of these obligations by $50.0 million and $59.4 million, respectively.As of December 31, 2011, the Company believes that it is in compliance with all financial covenants on itsmortgage debt and other loans.10. INCOME AND OTHER CORPORATE TAXESThe Company is a partnership for U.S. tax purposes and therefore is generally not subject to federal andstate income taxes. The following state provision reflects various state minimum taxes, the DCunincorporated business tax, and the prior year state tax true ups. The prior year state tax true ups reflectsthe state liabilities of the predecessor company TRZ Holdings II, LLC.Provision for Income and Other Corporate Taxes — The provision for income and other corporate taxesis as follows:2011 2010 2009Provision computed at combined federal and state statutory rates $ - $ - $ -Franchise, state income, alternative minimum and foreign taxesprovision (1,980) (18,510) (679)Provision from operations - - (203)Provisions on gains and losses - - -Total provisions $(1,980) $(18,510) $(882)As of December 31, 2011, there are no pending state tax audits.F-90

11. NONCONTROLLING INTERESTRedeemable Preferred Units — On October 5, 2006, the Company, through TRZ Holdings II, authorizedand issued 200 shares of 8% Series G Subordinated Preferred Units (“Series G”) with a par value of $0.001per unit. These units are held by an affiliate of Brookfield Properties. The Series G units are nonvoting andentitled to cumulative dividends at a fixed rate of 8% per annum, redeemable at TRZ Holdings II’s option atany time or from time to time, for cash at a redemption price of $10,000 per unit plus an amount equal to allaccrued and unpaid dividends plus a redemption premium based on a defined redemption period (the“Series G Redemption Price”). During the years ended December 31, 2011 and 2010, the Company paiddividends of $160 and $228 on the Series G units, respectively.12. MEMBERS’ EQUITYAt December 31, 2010 and 2009, the direct ownership interests in the Company held by BPO REIT, FREITand BREP were approximately 14%, 60% and 26%, respectively. The Company did not receive any capitalcontributions or distribute any funds to its members during the year ended December 31, 2010. OnAugust 9, 2011, BREP contributed $1,396,513 to the Company. In connection with the Call Option exercise,a non-monetary distribution with a value of $1,885,690 was made to BREP in the form of indirectownership interests in the BREP Properties in exchange for 100% of the Units held by BREP. Brookfield,through its subsidiaries, initiated a series of transactions on August 4, 2011 and September 9, 2011 toreorganize the ownership of the Units in the Company held by BPO REIT and FREIT. Holdco andSubFREIT received approximately 60% and 40%, respectively, of the total Units held by BPO REIT andFREIT as result of these transactions. On September 9, 2011, Holdco and SubFREIT contributed capital tothe Company of $396,322 and $261,365, respectively. On October 25, 2011, the Company distributed$23,032. The Company is approximately 60% directly owned by Holdco and approximately 40% directlyowned by SubFREIT as of December 31, 2011.13. RELATED-PARTY INFORMATIONPrior to the exercise of the Call Option, the Company paid affiliates of Blackstone a property managementfee for management services provided to the BREP Properties. For the years ended December 31, 2011,2010 and 2009, the Company recognized $2,930, $5,011 and $5,126 in management fee expense payable toBlackstone, respectively. The Blackstone managed properties paid all leasing commissions to independentthird-party brokers.The Company also pays affiliates of Brookfield a property management fee for management servicesprovided to the Brookfield properties. For the years ended December 31, 2011, 2010 and 2009, theCompany recognized $20,047, $18,326 and $19,242 in management fee expense payable to Brookfield,respectively. In addition, the Company pays affiliates of Brookfield a leasing fee for leasing services of theBrookfield managed properties. For the years ended December 31, 2011, 2010 and 2009, the Companyincurred $9,363, $11,339 and $13,401 in leasing fees, respectively. At December 31, 2011 and 2010, theCompany had a payable balance of $36,453 and $35,280, respectively, owed to Brookfield related tomanagement fees, leasing fees and various other related reimbursements.In connection with debt issued by subsidiaries of the Company and BPOP Canada Inc., both shareholders ofTRZ Holdings II (collectively, the “Mezzanine Borrowers”) through to April 9, 2009, totaling $3,100,707 asubsidiary of the Company, TRZ Holdings II, had guaranteed the obligation of the Mezzanine Borrowers. Inconsideration for its guarantee, the Company paid TRZ Holdings II an annual fee equal to 0.10% of theoutstanding principal for the first year with a 0.25% and 0.30% fee for the second and following yearsthereafter, respectively.F-91

Subsequent to April 9, 2009, in connection with debt issued totaling $3,100,707, a subsidiary of theCompany, TRZ Holdings II, had guaranteed the $3,100,707 obligation of the Company. In consideration forits guarantee, the Company will pay TRZ Holdings II an annual fee equal to 0.30% of the outstandingprincipal balance. These fees are fully eliminated in the accompanying consolidated financial statements.The guaranteed debt was repaid during 2011.Insurance premiums are paid by Brookfield Properties Holding Inc. (“BPHI”), an affiliate of the Company.BPHI then allocates the cost to the properties which is then fully reimbursed through an intercompanytransaction.14. CONTINGENCIESLitigation — The Company is contingently liable under guarantees that are issued in the normal course ofbusiness and with respect to litigation and claims arising from time to time. While the final outcome withrespect to claims and litigation pending at December 31, 2011 cannot be predicted with certainty, in theopinion of management, any liability which may arise from such contingencies would not have a materialadverse effect on the consolidated financial position, results of operations or liquidity of the Company.Concentration of Credit Risk — The Company maintains its cash at financial institutions. The combinedaccount balances at each institution typically exceed Federal Deposit Insurance Company (“FDIC”)insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit inexcess of FDIC insurance coverage. Management believes that this risk is not significant.The Company performs ongoing credit evaluations of tenants and may require tenants to provide some formof credit support, such as corporate guarantees and/or other financial guarantees. Although the Company’sproperties are geographically diverse and tenants operate in a variety of industries, to the extent theCompany has a significant concentration of rental revenue from any single tenant, the inability of that tenantto make its lease payments could have an adverse effect on the Company.Environmental — The Company, as an owner of real estate, is subject to various federal, state and locallaws and regulations relating to environmental matters. Under these laws, the Company is exposed toliability primarily as an owner or operator of real property and, as such, may be responsible for the cleanupor other remediation of contaminated property.Contamination for which the Company may be liable could include historic contamination, spills ofhazardous materials in the course of its tenants’ regular business operations and spills or releases ofpetroleum or other hazardous substances. An owner or operator can be liable for contamination in somecircumstances whether or not the owner or operator knew of, or was responsible for, the presence of suchcontamination. In addition, the presence of contamination on property, or the failure to properly clean up orremediate such contamination when present, may materially and adversely affect the ability to sell or leasesuch contaminated property or to borrow using such property as collateral.As an owner and operator of real property, the Company is also subject to various environmental laws thatregulate the use, generation, storage, handling, and disposal of any hazardous substances used in theordinary course of its business, including those relating to the storage of petroleum in aboveground orunderground storage tanks, and the use of any ozone-depleting substances in cooling systems. The Companybelieves that it is in substantial compliance with applicable environmental laws.Asbestos-containing material is present in some of the Company’s properties. Federal regulations requirebuilding owners and operators to identify and warn, via signs and labels, of potential hazards posed byworkplace exposure to installed asbestos-containing materials in their building. The regulations also setforth employee training and record keeping requirements pertaining to asbestos-containing materials andF-92

potentially asbestos-containing materials. Significant fines can be assessed for violation of these regulations.Building owners and operators may be subject to an increased risk of personal injury lawsuits by workersand others exposed to asbestos-containing materials. The regulations may affect the value of a buildingcontaining asbestos-containing materials. Federal, state and local laws and regulations also govern theremoval, release, encapsulation, disturbance, handling and/or disposal of asbestos-containing materials.Such laws may impose liability for improper handling or a release to the environment of asbestos-containingmaterials, including the imposition of substantial fines.The cost of compliance with existing environmental laws has not had a material adverse effect on theCompany’s financial condition and results of operations, and the Company does not believe it will havesuch an impact in the future. In addition, the Company has not incurred, and does not expect to incur, anymaterial costs or liabilities due to environmental contamination at properties it currently owns or has ownedin the past. However, the Company cannot predict the impact of new or changed laws or regulations on itsproperties or on properties that it may acquire in the future. The Company has no current plans forsubstantial capital expenditures with respect to compliance with environmental laws.Insurance — The Company carries insurance on its properties of types and in amounts that it believesadequately insure all of its properties and are in line with coverage obtained by owners of similar properties.The Company had two wholly owned captive insurance companies, Concordia Insurance L.L.C.(“Concordia”) and Chapman Insurance L.L.C. (“Chapman”) which were dissolved during 2008. Liberty ICCasualty, LLC was created to replace coverage provided previously by Chapman and Concordia.15. SUBSEQUENT EVENTSIn accordance with ASC Topic 855, Subsequent Events, the Company has evaluated subsequent events andtransactions up to and including March 29, 2012, which represents the date that the consolidated financialstatements were available to be issued and where necessary has made the appropriate disclosure.******F-93

INDEX TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS OF BROOKFIELDPROPERTY PARTNERS L.P.PageUnaudited Pro Forma Balance Sheet as at March 31, 2012Unaudited Pro Forma Statement of Income for the three months ended March 31, 2012 andthe year ended December 31, 2011Notes to the Unaudited Pro Forma Financial StatementsPF-2PF-5PF-6PF-1

Unaudited Pro Forma Financial StatementsBROOKFIELD PROPERTY PARTNERS L.P.PF-2

BROOKFIELD PROPERTY PARTNERS L.P.Unaudited Pro forma Financial StatementsThe following unaudited pro forma financial statements of Brookfield Property Partners L.P. (the “company”)adjust the company’s balance sheet as at March 31, 2012 and statements of income for the three months endedMarch 31, 2012 and the year ended December 31, 2011 to give effect to the acquisition of the Business (asdefined below) by the company from Brookfield Asset Management Inc. (“Brookfield” or the “parentcompany”), the spin-off (as defined below) and related transactions as if such transactions occurred as ofMarch 31, 2012, in the case of the unaudited pro forma balance sheet, or as January 1, 2011, in the case of theunaudited pro forma statements of income. Prior to the acquisition, Brookfield intends to effect a reorganization(the “reorganization”) so that an interest in its commercial property operations (the “Business”), including itsoffice, retail, multi-family and industrial, and opportunistic assets, is acquired by holding entities that will beowned by Brookfield Property L.P. (the “property partnership”).Brookfield intends to transfer a portion of the limited partnership interests it holds in the company to holders ofits Class A limited voting shares and Class B limited voting shares through a special dividend (the “spin-off”).Immediately following the reorganization and spin-off, the company’s sole direct investment will be an interestin the Business through the company’s ownership of limited partnership interests in the property partnership. Thecompany will control the strategic, financial and operating policy decisions of the property partnership pursuantto a voting agreement to be entered into between the company and Brookfield and, through its ownership of thelimited partnership units of the property partnership, benefit from the property partnership’s activities. Whollyownedsubsidiaries of Brookfield will serve as the general partners for both the company and the propertypartnership.The unaudited pro forma financial statements reflect adjustments for the reorganization, the spin-off, thefollowing related transactions and resulting tax effects:• Acquisition of interests in Brookfield’s Australian properties through participating loan notes• Issuance of $750 million of Capital Securities to Brookfield as partial consideration for the Businessacquired by the company• Issuance of $15 million of Preferred Shares by certain holding entities• Issuance of partnership units by the company as partial consideration for the business acquired by thecompany• Reorganization of the legal structure through which the Business is held, including the issuance ofcertain inter-company debt between the property partnership and the Holding Entities, resulting inchanges in the effective tax rate and the tax basis of certain investments• Annual Management Fees of $50 million paid by the company to Brookfield pursuant to a MasterServices Agreement• Exclusion of Brookfield’s 2% investment in Howard Hughes CorporationThe unaudited pro forma financial statements have been prepared based upon currently available information andassumptions deemed appropriate by management. The unaudited pro forma financial statements are provided forinformation purposes only and are not intended to represent, or be indicative of, the results that would haveoccurred had the transactions reflected in the pro forma adjustments been effected on the dates indicated.The accounting for certain of the above transactions will require the determination of pro forma adjustments togive effect to the transactions on the dates indicated. The pro forma adjustments are preliminary and have beenmade solely for the purpose of providing unaudited pro forma financial information. Differences between thesepreliminary estimates and the final accounting for these transactions may occur and these differences could havea material impact on the accompanying unaudited pro forma financial statements. Further, integration costs, inany, that may be incurred upon consummation of the aforementioned transactions have been excluded from theunaudited pro forma statements of income.All financial data in these unaudited pro forma financial statements is presented in U.S. dollars and has beenprepared in accordance with International Financial Reporting Standards as issued by the InternationalAccounting Standards Board.PF-3

BROOKFIELD PROPERTY PARTNERS L.P.Unaudited Pro forma Balance SheetAs at March 31, 2012(US$ Millions)BrookfieldPropertyPartnersL.P. (1)BrookfieldCarve-outAustralianInvestments4 (a)CapitalSecurities4 (b)PreferredShares4 (c)Pro Forma AdjustmentsPartnershipUnits4 (d)Tax Impact ofReorganization4 (e)HHC4 (g)Pro FormaTotal Pro BrookfieldForma PropertyAdjustments Partners L.P.AssetsNon-current assetsInvestment properties $ - $ 28,138 $ (924) $ - $ - $ - $ - $ - $ (924) $ 27,214Equity accounted investments - 7,466 (553) - - - - - (553) 6,913Participating loan notes - - 854 - - - - - 854 854Other non-current assets - 2,331 - - - - - (102) (102) 2,229Loans and notes receivable - 1,096 - - - - - - - 1,096- 39,031 (623) - - - - (102) (725) 38,306Current assetsLoans and notes receivable - 548 - - - - - - - 548Accounts receivable and other - 773 (18) - - - - - (18) 755Cash and cash equivalents - 697 (9) - - - - - (9) 688- 2,018 (27) - - - - - (27) 1,991Total assets $ - $ 41,049 $ (650) $ - $ - $ - $ - $ (102) $ (752) $ 40,297Liabilities and equity in netassetsNon-current liabilitiesProperty debt $ - $ 14,006 $ (639) $ - $ - $ - $ - $ - $ (639) $ 13,367Capital securities - 862 - 750 - - - - 750 1,612Other non-current liabilities - 288 - - - - - - - 288Deferred tax liability - 805 (23) - - - 150 - 127 932- 15,961 (662) 750 - - 150 - 238 16,199Current liabilitiesProperty debt - 1,260 - - - - - - - 1,260Accounts payable and otherliabilities - 1,229 (28) - - - - - (28) 1,201- 2,489 (28) - - - - - (28) 2,461Equity in net assetsEquity in net assets attributable toparent - 12,575 - - - (12,575) - - (12,575) -Partnership equity - - 40 (750) (15) 12,575 (150) (85) 11,615 11,615Non-controlling interests - 10,024 - - 15 - - (17) (2) 10,022Total equity in net assets - 22,599 40 (750) - - (150) (102) (962) 21,637Total liabilities and equity innet assets $ - $ 41,049 $ (650) $ - $ - $ - $ - $ (102) $ (752) $ 40,297(1) Includes Brookfield Property Partners L.P. balance sheet as at May 31, 2012 which includes partnership equity of $0.001 million which is notpresented due to rounding.See accompanying notes to the unaudited pro forma financial statementsPF-4

BROOKFIELD PROPERTY PARTNERS L.P.Unaudited Pro forma Statement of IncomeFor the three months endedMarch 31, 2012BrookfieldPropertyPartnersL.P.Pro Forma AdjustmentsPro FormaBrookfieldPropertyPartners L.P.Australian Capital Preferred Management Tax Impact ofTotal ProBrookfield Investments Securities Shares Fee Reorganization HHC Forma(US$ Millions)Carve-out 4 (a) 4 (b) 4 (c) 4 (f) 4 (e) 4 (g) AdjustmentsRevenue $ - $ 775 $ (25) $ - $ - $ - $ - $ - $ (25) $ 750Property net operating income 409 (20) - - - - - (20) 389Investment and other income - 39 14 - - - - - 14 53- 448 (6) - - - - - (6) 442Interest expense - 246 (16) 11 - - - - (5) 241General and administrative expense - 21 - - - 13 - - 13 34Depreciation and amortization - 39 - - - - - - - 39Income before fair value gains,realized gains, share of netearnings from equityaccounted investments andincome taxes - 142 10 (11) - (13) - - (14) 128Fair value gains - 287 - - - - - (13) (13) 274Realized gains - 78 - - - - - - - 78Share of net earnings from equityaccounted investments - 442 (10) - - - - - (10) 432Income before income taxes - 949 - (11) - (13) - (13) (37) 912Income tax (expense) benefit - (239) - - - 3 22 - 25 (214)Net income $ - $ 710 $ - $ (11) $ - $ (10) $ 22 $ (13) $ (12) $ 698Net income attributable to:Parent company and partners $ - $ 383 $ - $ (11) $ - $ (10) $ 22 $ (13) $ (12) $ 371Non-controlling interests - 327 - - - - - - - 327$ - $ 710 $ - $ (11) $ - $ (10) $ 22 $ (13) $ (12) $ 698See accompanying notes to the unaudited pro forma financial statementsFor the year ended December 31, 2011BrookfieldPropertyPartnersL.P.Pro Forma AdjustmentsPro FormaBrookfieldPropertyPartners L.P.Australian Capital Preferred Management Tax Impact of Total ProBrookfield Investments Securities Shares Fee Reorganization Forma(US$ Millions)Carve-out 4 (a) 4 (b) 4 (c) 4 (f) 4 (e) AdjustmentsRevenue $ - $ 2,820 $ (143) $ - $ - $ - $ - $ (143) $ 2,677Property net operating income 1,507 (76) - - - - (76) 1,431Investment and other income - 177 43 - - - - 43 220- 1,684 (33) - - - - (33) 1,651Interest expense - 977 (69) 43 - - - (26) 951General and administrative expense - 84 - - - 50 - 50 134Depreciation and amortization - 20 - - - - - - 20Income before fair value gains, realizedgains, share of net earnings fromequity accounted investments andincome taxes - 603 36 (43) - (50) - (57) 546Fair value gains - 1,112 9 - - - - 9 1,121Realized gains - 365 - - - - - - 365Share of net earnings from equity accountedinvestments - 2,104 (45) - - - - (45) 2,059Income before income taxes - 4,184 - (43) - (50) - (93) 4,091Income tax (expense) benefit - (439) - - - 14 (403) (389) (828)Net income $ - $ 3,745 $ - $ (43) $ - $ (36) $ (403) $ (482) $ 3,263Net income attributable to:Parent company and partners $ - $ 2,323 $ - $ (43) $ (1) $ (36) $ (403) $ (483) $ 1,840Non-controlling interests - 1,422 - - 1 - - 1 1,423See accompanying notes to the unaudited pro forma financial statements$ - $ 3,745 $ - $ (43) $ - $ (36) $ (403) $ (482) $ 3,263PF-5

NOTES TO THE UNAUDITED PRO FORMA FINANCIALSTATEMENTS1. NATURE AND DESCRIPTION OF THE LIMITED PARTNERSHIPBrookfield Property Partners L.P. (the “company”) was established by Brookfield Asset Management Inc.(“Brookfield” or the “parent company”) as the primary entity through which it and its affiliates will own andoperate commercial property on a global basis. The registered head office of the company is 73 Front Street, 5thFloor, Hamilton HM 12, Bermuda.The company’s sole direct investment is a limited partnership interest in Brookfield Property L.P. (the “propertypartnership”). In addition to the Redemption-Exchange units described below, Brookfield, through Property GPL.P. (the “Property GP”), its indirect wholly-owned subsidiary, will hold a 1% general partnership interest in theproperty partnership. The property partnership holds all of the common shares or equity interests, as applicable,of the Holding Entities, which are newly formed entities under the laws of the Province of Ontario, the State ofDelaware and Bermuda established to hold the company’s interest in the Business described below.Brookfield will effect a reorganization (the “reorganization”) so that an interest in its commercial propertyoperations, including its office, retail, multi-family and industrial and opportunistic assets, located in the UnitedStates, Canada, Australia, Brazil and Europe, that have historically been owned and operated, both directly andthrough its operating entities, by Brookfield, is acquired by the Holding Entities. The commercial propertyoperations transferred to the company through the reorganization (the “Business”) includes all of the commercialproperty operations of Brookfield included in the carve-out financial statements except for its 2% equity interest inthe Howard Hughes Corporation (“HHC”), a publicly listed real estate entity, (refer to Note 4(g) to the unauditedpro forma financial statements). Also, as described in Note 4(a) to the unaudited pro forma financial statements, asubsidiary of Brookfield will continue to hold title to the commercial and other real property in Australia. Thecompany will hold an economic interest in such property in the form of participating loan notes receivable fromBrookfield.In consideration for the Business, the company and its subsidiaries will issue to Brookfield:• $750 million of redeemable preferred shares of one of the Holding Entities formed under the laws ofOntario;• Redemption-Exchange units in the property partnership and• The general and limited partnership interests in the company.Also, in connection with the reorganization, Brookfield will provide a total of $15 million of working capital tothe Holding Entities by subscribing for preferred shares of such entities (refer to Note 4(c)).Subsequent to the reorganization, Brookfield intends to transfer a portion of its non-voting limited partnershipunits in the company to holders of its Class A limited voting shares and Class B limited voting shares, through aspecial dividend (the “spin-off”). Immediately following the reorganization and spin-off, the holders ofBrookfield’s Class A and Class B limited voting shares public holders of the company’s units will ownapproximately 10% of the issued and outstanding units of the company on a fully-exchanged basis andBrookfield will hold units of the company and Redemption-Exchange units that, taken together, on a fullyexchanged basis represent approximately 90% of the units of the company.Pursuant to its accounting policy for common control transactions described further in Note 3 to the unaudited proforma financial statements, the company will recognize the Business acquired from Brookfield at the carryingamount in Brookfield’s financial statements immediately prior to the reorganization and spin-off. As discussedfurther in Note 4(b) to the unaudited pro forma financial statements, the capital securities issued by one of theHoldings Entities will be accounted for as a liability by the company and will be initially recognized at their fairvalue. The Redemption-Exchange units in the property partnership and the general and limited partnership interestsin the company are recognized as equity of the company as discussed in Notes 4(c) and 4(d), respectively.PF-6

The company and Brookfield intend for the company to have control over the property partnership and PropertyGP following the spin-off. Accordingly, the company will enter into a voting agreement with Brookfield (the“Voting Agreement”) pursuant to which any voting rights Brookfield holds with respect to the election ofdirectors of the property partnership or the Property GP will be voted in favor of directors approved by thecompany. Also under the Voting Agreement, the company will have the right to approve or reject major strategicdecisions relating to the property partnership, including the liquidation of its assets, business combinations orother material corporate transactions involving the property partnership, any proposed dissolution of the propertypartnership, amendments to the limited partnership agreements of the property partnership or the Property GPand the removal of the Property GP.Prior to the spin-off, the company is expected to enter into a three-year unsecured credit facility with Brookfieldthat will provide borrowings on a revolving basis of up to $500 million, which will be used for working capitalpurposes. The credit facility will be guaranteed by the company, the property partnership and each of the HoldingEntities. It is expected that no amounts will be drawn on the facility as of the date of the spin-off.2. BASIS OF PRESENTATIONThe company’s unaudited pro forma balance sheet as March 31, 2012 and unaudited pro forma statements ofincome for the three months ended March 31, 2012 and year ended December 31, 2011 have been preparedassuming the transactions described herein had each occurred as of March 31, 2012, in the case of the unauditedpro forma balance sheet, and as of January 1, 2011 in the case of the unaudited pro forma statements of income.The company’s unaudited pro forma financial statements have been prepared using the carve-out financialstatements of the Business (the “Brookfield Carve-out financial statements”) for the three months endedMarch 31, 2012 and the year ended December 31, 2011 included elsewhere in this Form 20-F/A.The unaudited pro forma financial statements have been prepared for informational purposes only and should beread in conjunction with the Brookfield Carve-out financial statements and related disclosures. The preparationof these unaudited pro forma financial statements requires management to make estimates and assumptionsdeemed appropriate. The unaudited pro forma financial statements are not intended to represent, or be indicativeof, the actual financial position and results of operations that would have occurred if the transactions describedbelow had been effected on the dates indicated, nor are they indicative of the company’s future results.3. SIGNIFICANT ACCOUNTING POLICIESThe company presents its financial statements in accordance with International Financial Reporting Standards asissued by the International Accounting Standards Board (“IFRS”). The accounting policies used in thepreparation of the company’s unaudited pro forma financial statements are those that are set out in the BrookfieldCarve-out financial statements for the year ended December 31, 2011. Accounting policies applied in accountingfor the impacts of the reorganization and spin-out transactions in the unaudited pro forma financial statements aresummarized herein.(a) Basis of ConsolidationThe unaudited pro forma financial statements include the accounts of the company and its subsidiaries, which arethe entities over which the company has control. Control exists when the company has the power, directly orindirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities.The company will control the strategic financial and operating policy decisions of the property partnershippursuant to the Voting Agreement described in Note 1 to these unaudited pro forma financial statements and,through its ownership of the limited partnership units of the property partnership, benefit from the propertypartnerships activities. Accordingly, the company has consolidated the property partnership in the unaudited proforma financial statements.PF-7

(b) Common control transactionsIFRS does not include specific measurement guidance for transfers of businesses or subsidiaries between entitiesunder common control. The company has developed a policy to account for such transactions for the purposes ofpreparing the unaudited pro forma financial statements taking into consideration other guidance in the IFRSframework and pronouncements of other standard-setting bodies. Consistent with the policy applied in theBrookfield Carve-out financial statements, the company’s policy is to record assets and liabilities recognized as aresult of transfers of businesses or subsidiaries between entities under common control at the carrying value inthe transferor’s financial statements immediately prior to such transfer.4. PRO FORMA ADJUSTMENTSThis note should be read in conjunction with Note 2 to the unaudited pro forma financial statements, Basis ofPresentation. The unaudited pro forma financial statements adjust the Brookfield Carve-out financial statementsto give effect to the reorganization and the spin-off, the transactions set out below and the resulting tax effects:• Acquisition of interests in Brookfield’s Australian assets through participating loan notes• Issuance of $750 million of Capital Securities to Brookfield as partial consideration for the Businessacquired by the company• Issuance of $15 million of Preferred Shares by certain holding entities• Issuance of partnership units by the company as partial consideration for the business acquired by thecompany• Reorganization of the legal structure through which the Business is held, including the issuance ofcertain inter-company debt between the property partnership and the Holding Entities, resulting inchanges in the effective tax rate and the tax basis of certain investments• Annual Management Fees of $50 million paid by the company to Brookfield pursuant to a MasterServices Agreement• Exclusion of Brookfield’s 2% investment in HHCIntegration costs, if any, that may be incurred upon consummation of the acquisition and other transactions havebeen excluded from the unaudited pro forma statements of income. As the principal operating entities comprisingthe Business generally maintain their own independent management and infrastructure which are expected to beretained following the reorganization and spin-off, the integration costs are not expected to be significant.(a) Acquisition of interests in Brookfield’s Australian assets through participating loan interestsThe Holding Entities will hold economic interests in Brookfield’s commercial and other real property inAustralia (the “referenced properties”) in the form of participating loan agreements with Brookfield, which arehybrid instruments comprising an interest bearing note, a total return swap and an option to acquire direct orindirect legal ownership to the referenced properties. The initial principal amount of the participating loaninterests will be the fair value of Brookfield’s net interest in the referenced properties. The participating loaninterests will provide the Holding Entities with an interest in the results of operations and changes in fair value ofthe referenced properties. At the date of the spin-off, Brookfield will continue to hold legal title to the referencedproperties through a wholly-owned subsidiary that is not part of the Business in order to preserve existingfinancing arrangements. These participating loan notes will be convertible by the Holding Entities, at any time,into direct ownership interests in the referenced properties or the entities that have direct ownership of suchproperties (the “Australian property subsidiaries”). Certain of these participating loan notes will provide theHolding Entities with control over the Australian property subsidiaries and, accordingly, the assets, liabilities andresults of those property subsidiaries will be consolidated by the Holding Entities. Where the participating loaninterest does not provide the Holding Entities with control over an Australian property subsidiary, it will beaccounted for as a loan receivable with related interest income reflecting the operating cash flows of theunderlying property. Included in the participating loan notes that are accounted for as loans receivable is anembedded derivative representing the Holding Entities’ right to participate in the changes in value of thereferenced properties, such embedded derivative will be measured at fair value with changes in value reflected inearnings in the period when they occur.PF-8

The unaudited pro forma balance sheet reflects the reclassification of certain investment properties, equityaccounted investments, property debt and related balances to participating loan notes for those participating loannotes that do not provide the Holding Entities with control over the Australian property subsidiary that owns thereferenced properties. Also, the property net operating income, interest expense and share of earnings fromequity accounted investments associated with the referenced properties are reclassified to investment and otherincome in the unaudited pro forma statements of income. The fair value gains associated with those participatingloan notes when the referenced properties are accounted for as equity accounted investments in the BrookfieldCarve-out financial statements have been reclassified to fair value gains from share of net earnings from equityaccounted investments.In addition, the unaudited pro forma balance sheet reflects an adjustment to derecognize certain derivatives witha carrying value of $17 million, which are designated as hedges of property debt associated with the Australianoperations and are included in accounts payable and other liabilities in the Brookfield Carve-out financialstatements, as these instruments are in entities that will not be transferred to the Holding Entities.The initial tax basis of the participating loan notes through which the economic interests in the referencedproperties are held by the Holding Entities will initially be equal to their carrying amounts. Accordingly, the netdeferred tax liability of $23 million relating to these properties reflected in deferred tax liability in the BrookfieldCarve-out financial statements has been derecognized in the unaudited pro forma financial statements.(b) Issuance of Capital SecuritiesBrookfield will hold $750 million of redeemable and retractable preferred shares in one of the Holding Entitiesformed under the laws of Ontario, which it will receive as partial consideration for causing the propertypartnership to acquire substantially all of Brookfield’s commercial property operations. The preferred shares areentitled to receive a cumulative preferential dividend equal to 5.75% of their redemption value as and whendeclared by the board of directors of the Holding Entity until the fifth anniversary of their issuance, after whichthe redeemable preferred shares will be entitled to receive a cumulative preferential dividend equal to 5.0% plusthe prevailing yield for 5-year U.S. Treasury Notes.As the company will be required to redeem the shares for cash or other consideration, they have been accountedfor as liabilities within capital securities in the pro forma balance sheet. As they are a financial liability, thecapital securities are initially measured at their fair value which is presumed to be the redemption amount in theunaudited pro forma financial statements as the redeemable preferred shares are at market terms. The relateddividends have been presented as interest expense in the unaudited pro forma statements of income for the threemonths ended March 31, 2012 and the year ended December 31, 2011 in the amount of $11 million and $43million, respectively.(c) Issuance of Preferred SharesIn connection with the reorganization, Brookfield will provide a total of $15 million of working capital to theHolding Entities by subscribing for $5 million of preferred shares in each of three Holding Entities. The preferredshares are entitled to receive a cumulative preferential cash dividend equal to $0.75 million per year as and whendeclared by the board of the directors of the applicable Holding Entity and are redeemable at the option of theapplicable Holding Entity at any time after the twentieth anniversary of their issuance.As the company and its subsidiaries are not obligated to redeem the preferred shares, they have been determinedto be equity of the Holding Entities and are reflected as a $15 million increase in non-controlling interest in theunaudited pro forma balance sheet. The unaudited pro forma statement of income for the three months endedMarch 31, 2012, and the year ended December 31, 2011 adjusts net income attributable to non-controllinginterest by $0.19 million and $0.75 million, respectively, for the dividends on the preferred shares.PF-9

(d) Partnership EquityOn completion of the reorganization and spin-off, partnership equity will include the general and limitedpartnership units in the company and the Redeemption-Exchange units of the property partnership.In connection with the reorganization, the property partnership will issue Redemption-Exchange units toBrookfield that may, at the request of the holder beginning two years from the date of closing of the spin-off,require the property partnership to redeem all or a portion of the holder’s units of the property partnership forcash in an amount equal to the market value of one of the company’s units multiplied by the number of units tobe redeemed (subject to certain adjustments). This right is subject to the company’s right of first refusal whichentitles it, at its sole discretion, to elect to acquire any unit so presented to the property partnership in exchangefor one of the company’s units (subject to certain customary adjustments). The Redemption-Exchange units havebeen presented as partnership equity in the unaudited pro forma balance sheet as they do not entail a contractualobligation on the part of the company to deliver cash and can be settled by the company, at its sole discretion, byissuing a fixed number of its own equity instruments.Equity in net assets attributable to parent company in the Brookfield Carve-out financial statements has beenpresented as partnership equity in the unaudited pro forma financial statements to reflect the impact of thereorganization and spin-off. Income attributable to parent company in the Brookfield Carve-out financialstatements has been presented as net income attributable to partners in the pro forma statement of income andadjusted for the impact of the dividends on preferred shares issued by the Holding Entities.(e) Tax Impacts of ReorganizationThe reorganization will impact the effective tax rate of the Business as the Holding Entities through which thecompany will hold the Business are different from those through which it was historically held by Brookfield,and result in the issuance of certain inter-company debt between the property partnership and the HoldingEntities.The aggregate impact of the reorganization on income tax expense in the pro forma statements of income, givingeffect to certain elements of the reorganization that were completed in the first quarter of 2012 as though theyoccurred on January 1, 2011, is a decrease of $22 million and an increase of $403 million for the three monthsended March 31, 2012 and the year ended December 31, 2011, respectively. The aggregate impact of thereorganization on the deferred tax liability in the pro forma balance sheet is an increase of $150 million as atMarch 31, 2012.(f) Management FeesThe pro forma statements of income reflect a charge of $12.5 million for the three months ended March 31, 2012and $50 million for the year ended December 31, 2011, respectively, together with the associated tax effects of$3.4 million and $13.6 million, respectively, representing an estimate of the annual management fee that wouldbe paid by the company to a subsidiary of Brookfield for services rendered in connection with a Master ServicesAgreement to be entered into in connection with the reorganization and spin-off. The estimated ManagementFees are based on an annual base management fee of $50 million (subject to an annual escalation by a specifiedinflation factor beginning on January 1, 2014).The property partnership will also pay a quarterly equity enhancement distribution to the Property GP of0.3125% of the amount by which the company’s total capitalization value at the end of each quarter exceeds itstotal capitalization value determined immediately following the spin-off. As this is based on the futurecapitalization value of the company, which cannot be reliably estimated, the expense associated with the equityenhancement distribution has not been included in the pro forma statements of income.This adjustment does not reflect public company costs which management expects will be approximately$5 million per year.PF-10

(g) Exclusion of Brookfield’s 2% investment in HHCThe Brookfield Carve-out financial statements include Brookfield’s 2% common equity interest in HHC which isclassified as securities designated as available-for-sale that is not included in the Business pursuant to thereorganization.The unaudited pro forma balance sheet reflects the derecognition of this investment with a correspondingreduction in the equity in net assets attributable to the parent. The unaudited pro forma statements of income forthe three months ended March 31, 2012 and the year ended December 31, 2011 reflect a reversal of fair valuegains of $13 and nil, respectively, that were reflected in the Brookfield Carve-out financial statements for thoseperiods.PF-11

Exhibit 1.1Registration No. 46137BERMUDACERTIFICATE OF REGISTRATIONFOR A PARTNERSHIP TO BE REGISTERED AS ANEXEMPTED PARTNERSHIP AND LIMITED PARTNERSHIPI HEREBY CERTIFY THAT in accordance with section 9(4) of the Exempted Partnerships Act 1992 and amendments (“theAct”), the registration documents of Brookfield Income Property Partners L.P. were delivered to the Office of the Registrar ofCompanies and registered on the 3rd day of January 2012. Facsimiles of the Certificate of Exempted Partnership and the Certificateof Limited Partnership pursuant to Section 5 of the Act, and Section 3 of the Limited Partnership Act 1883 and amendments,respectively, are attached to this Certificate of Registration.Given under my hand and the Seal of the Registrar of Companiesthis 13th day of January 2012for Registrar of Companies

REF58435NAME OF PARTNERSHIP:CERTIFICATE OF EXEMPTED PARTNERSHIP(Pursuant to Section 5 of the Exempted Partnerships Act 1992 (as amended) andSection 4A of the Partnership Act 1902) (as amended))Brookfield Income Property Partners L.P.GENERAL PARTNER(S):1648285 ALBERTA ULCSuite 800, 400-3rd Avenue SWCalgary, Alberta, T2P 4H2CanadaREGISTERED OFFICE:73 Front StreetHamilton, HM 12BermudaRESIDENT REPRESENTATIVE:Jane SheereLEGAL PERSONALITY: N/AThe Partnership elects to have legal personality pursuant toSection 4A of the Partnership Act 1902 (as amended)on behalf of the PartnershipOR1648285 ALBERTA ULC for itself and on behalf of the limited partners of the PartnershipBy: /s/ Christopher BroughChristopher BroughAttorney-in-fact3 January 2012Dated this 30th day of December 2011

REF58435NAME OF PARTNERSHIP:Brookfield Income Property Partners L.P.GENERAL PARTNER(S):1648285 ALBERTA ULCSuite 800, 400-3rd Avenue SWCalgary, Alberta, T2P 4H2CanadaREGISTERED OFFICE:73 Front StreetHamilton, HM 12BermudaCERTIFICATE OF LIMITED PARTNERSHIP(Pursuant to Section 3 of the Limited Partnership Act 1883 (as amended) andSection 4A of the Partnership Act 1902 (as amended))LEGAL PERSONALITY: N/AThe Partnership elects to have legal personality pursuant toSection 4A of the Partnership Act 1902 (as amended)1648285 ALBERTA ULC for itself and on behalf of the limited partners of the PartnershipBy: /s/ Christopher BroughChristopher BroughAttorney-in-fact3 January 2012Dated this 30th day of December 2011

DECLARATIONMade pursuant to The Exempted Partnerships Act 1992EXEMPTED PARTNERSHIPIn respect of:Brookfield Income Property Partners L.P.IT IS HEREBY CERTIFIED that at the date hereof the general nature of the business transacted by the above-named partnership isas follows:The primary purpose of this Partnership is to: (i) serve as a limited partner of Brookfield Income Property L.P.; (ii) acquire,hold, transfer, sell, dispose of, exchange, vote or otherwise exercise all rights, powers, privileges and other incidents ofownership or possession with respect to securities, investments and other partnership property; and (iii) to engage in any otherbusiness or activity that now or hereafter may be necessary, incidental, proper, advisable or convenient to accomplish theforegoing purposes and that is not forbidden by the law of the jurisdiction in which the Partnership engages in that business.The Partnership may also engage in or participate in any other lawful activities in which limited partnerships formed inBermuda may engage or participate.Signed: /s/ Christopher BroughChristopher BroughAttorney-in-fact for and on behalf of thegeneral partner, 1648285 Alberta ULC foritself and on behalf of the limited partner ofthe PartnershipDate: 3 January 2012Appropriate Fee: BD$2,235.00

REF58435BERMUDAExempted Partnership Act 1992CONSENTPursuant to Sections 8In exercise of the powers conferred by section 8 of the Exempted Partnerships Act 1992, the Bermuda Monetary Authority herebygives consent for:Brookfield Income Property Partners L.P.to be registered as an Exempted Partnership and hereby confirms that approval is given for:1648285 ALBERTA ULCto be the General Partner(s) of the Partnership.Dated this 30th day of December 2011 Bermuda Monetary Authority

REF58435BERMUDALimited Partnership Act 1883CONSENTPursuant to Section 5(1)In exercise of the powers conferred by section 5(1) of the Limited Partnership Act, 1883, the Bermuda Monetary Authority herebygives consent for the formation of:as a Limited Partnership.Brookfield Income Property Partners L.P.Dated this 30th day of December 2011 Bermuda Monetary Authority

CONDITIONSIn exercise of the powers conferred by the Exchange Control Act 1972 (and Regulations 1973), the Controller hereby gives consentsto the application with the following conditions:The Partnership is “non-resident” for Exchange Control purposes. As a non-resident:(a)(b)(c)Foreign currency accounts (all currencies other than Bermuda dollars) with Banks in or outside Bermuda may be openedand maintained without reference to this control. Balances on such accounts are freely convertible into other foreigncurrencies;“External Bermuda Dollar” accounts with banks in Bermuda may be opened and maintained provided that balances thereonare limited to those necessary to meet day-to-day local expenses. In this connection it should be noted that the banks inBermuda are not authorised to pay interest on balances on such accounts, nor may such accounts be overdrawn withoutspecific exchange control approval; andResident Bermuda Dollar accounts may not be opened in the name of the Partnership.The terms of paragraphs (a) to (c) above also apply to any non-Bermudian persons employed in Bermuda by the Partnership.Dated this 30th day of December 2011 Controller of Foreign Exchange

Registration No. 46137BERMUDACERTIFICATE OF DEPOSITOF SUPPLEMENTARY CERTIFICATETHIS IS TO CERTIFY that a Supplementary Certificate of Brookfield Income Property Partners L.P., showing a change ofname to Brookfield Property Partners L.P., was delivered to the Office of the Registrar of Companies and registered on the 8th dayof March 2012 pursuant to section 8B(4) of the Limited Partnership Act 1883 and 13(5) of the Exempted Partnership Act 1992 asamended.Given under my hand and the Seal of the REGISTRAR OFCOMPANIES this 13th day of March 2012for Registrar of Companies

Dated the 8 th day of March 2012.THE LIMITED PARTNERSHIP ACT, 1883SUPPLEMENTARY CERTIFICATE OF PARTICULARS OFA LIMITED PARTNERSHIPPursuant to Section 8B(4)Name of the Limited Partnership: Brookfield Property Partners L.P.Name and Address of the General Partner:1648285 Alberta ULCSuite 800, 400-3rd Avenue SWCalgaryAlberta T2P 4H2CanadaAddress of the Registered Office of the Partnership inBermuda:Signed: /s/ Christopher BroughName: Christopher BroughAttorney-in-fact for the General Partnerfor itself and on behalf of the limited partnerof the Partnership73 Front Street5thFloorHamilton HM12Bermuda

Dated the 8thday of March 2012.THE EXEMPTED PARTNERSHIPS ACT, 1992SUPPLEMENTARY CERTIFICATE OF PARTICULARS OFAN EXEMPTED PARTNERSHIPPursuant to Section 13(5)Name of the Partnership: Brookfield Property Partners L.P.Name and Address of the General Partner:1648285 Alberta ULCSuite 800, 400-3rd Avenue SWCalgaryAlberta T2P 4H2CanadaName and Address of the Resident Representative:Jane Sheere73 Front Street5thFloorHamilton HM12BermudaRegistered Office of the Partnership:73 Front Street5 th FloorHamilton HM 12BermudaSigned: /s/ Christopher BroughName: Christopher BroughAttorney-in-fact for the General Partnerfor itself and on behalf of the limited partnerof the Partnership

Dated: as of 3 January 2012Exhibit 1.2(1) 1648285 Alberta ULC(2) Brookfield Asset Management Inc.LIMITED PARTNERSHIP AGREEMENTIn respect ofBrookfield Income Property Partners L.P.APPLEBY

THIS LIMITED PARTNERSHIP AGREEMENT of Brookfield Income Property Partners L.P. (the “Partnership”) dated as of3 January 2012 is madeBETWEEN:(1) 1648285 Alberta ULC, an unlimited liability corporation formed under the laws of Alberta, having its registered office at Suite800, 400-3rdAvenue SW, Calgary, Alberta, T2P 4H2, Canada (“General Partner”); and(2) Brookfield Asset Management Inc., a corporation formed under the laws of Ontario, having its registered office at 181 BayStreet, Suite 300, Toronto, Ontario, M5J 2TS, Canada (“Initial Limited Partner”).NOW THEREFORE the General Partner and the Initial Limited Partner (collectively, the “Partners”) hereby agree as follows:1. FORMATION.The Partnership is formed pursuant to the Limited Partnerships Act 1883 of Bermuda, Partnership Act 1902 of Bermuda, and theExempted Partnerships Act 1992 of Bermuda (together, the “Partnership Acts”).2. CERTIFICATE OF PARTICULARS OF A LIMITED PARTNERSHIP: CERTIFICATE OF PARTICULARS OF ANEXEMPTED PARTNERSHIP.The General Partner shall file a Certificate of Particulars of a Limited Partnership and a Certificate of Particulars of anExempted Partnership and the Partners shall take such further action as shall be appropriate to comply with all requirement ofthe formation and operation of an exempted limited partnership in Bermuda, and all other jurisdictions where the Partnershipmay elect to do business.3. NAME.The name of the Partnership is “Brookfield Income Property Partners L.P.”. The General Partner shall have the power to changethe name of the Partnership and shall give prompt notice of any such change to each Partner.4. CHARACTER OF BUSINESS.The primary purpose of this Partnership is to: (i) acquire, hold, transfer, sell, dispose of, exchange, vote or otherwise exercise allrights, powers, privileges and other incidents of ownership or possession with respect to securities, investments and otherpartnership property; and (ii) to engage in any other business or activity that now or hereafter may be necessary, incidental,proper, advisable or convenient to accomplish the foregoing purposes and that is not forbidden by the law of the jurisdiction inwhich the Partnership engages in that business. The Partnership may also engage in or participate in any other lawful activitiesin which limited partnerships formed in Bermuda may engage or participate.1

5. REGISTERED OFFICE.The registered office and principal place of business of the Partnership is 73 Front Street, Hamilton HM12, Bermuda, or at suchplace as may be designated by the General Partner.6. RESIDENT REPRESENTATIVE.The resident representative of the Partnership shall be Jane Sheere, 73 Front Street, Hamilton HM12, Bermuda, or such otherperson as may be appointed by the General Partner.7. CAPITAL.The General Partner shall contribute US$100.00 to the capital of the Partnership and shall be issued 100 general partner units inrespect thereof which units shall entitle the General Partner to all the rights of a general partner of an exempted limitedpartnership under Bermuda law and the Initial Limited Partner shall contribute US$900.00 to the capital of the Partnership andshall be issued 900 limited partner units in respect thereof which units shall entitle the Initial Limited Partner to all the rights of alimited partner of an exempted limited partnership under Bermuda law. No additional capital contributions by the Partners arerequired, or without the consent of the General Partner, permitted.8. WITHDRAWALS: RETURN OF CAPITAL.The Initial Limited Partner may withdraw from the Partnership upon the admission of the additional limited partners to thePartnership, and upon such withdrawal, its capital contribution shall be returned. The withdrawal of a Limited Partner hereundershall not cause the dissolution of the Partnership, and all Partners shall continue to be subject to the provisions of this Agreementin all respects. The General Partner shall have no right to withdraw from the Partnership.9. ADMISSION OF ADDITIONAL LIMITED PARTNERS.Additional limited partners (“Additional Limited Partners”) may be admitted to the Partnership by the General Partner, in itssole discretion. The prior consent of existing Limited Partners shall not be required to admit Additional Limited Partners and theadmission of Additional Limited Partners shall not dissolve the Partnership, and all Partners shall continue to be subject to theprovisions of this Agreement in all respects.10. NO ASSIGNMENT.No Partner may pledge, sell, assign or otherwise transfer its interest in the Partnership without the consent of the GeneralPartner. The assignment by any Limited Partner hereunder shall not cause the dissolution of the Partnership, and all Partnersshall continue to be subject to the provisions of this Agreement in all respects.2

11. TERM: DISSOLUTION: CONTINUATION OF PARTNERSHIP.The term of the Partnership shall commence on the date of registration of the Certificates, and shall continue until terminated bythe first to occur of:11.1 an election to terminate the Partnership by the General Partner;11.2 the mutual agreement of the Partners; or11.3 the bankruptcy, or dissolution of the General Partner.12. MANAGEMENT.12.1 The General Partner may act for the Partnership in all matters.12.2 The General Partner shall have full and complete charge of the management and control of the Partnership’s business andits assets, subject to the terms and conditions of this Agreement.13. INDEMNITY13.1 Subject to the proviso below, the General Partner and any Director, Officer, committee member, liquidator, manager ortrustee of the General Partner for the time being acting in relation to the affairs of the Partnership (each an “IndemnifiedPerson”), and his heirs, executors and administrators shall be indemnified and held harmless out of the assets of thePartnership against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort andstatute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable)incurred or suffered by him by or by reason of any act done, conceived in or omitted in the conduct of the Partnership’sbusiness or in the discharge of his duties and the indemnity contained in this clause shall extend to any Indemnified Personacting in any office or trust in the reasonable belief that he has been appointed or elected to such office or trustnotwithstanding any defect in such appointment or election PROVIDED ALWAYS that the indemnity contained in thisclause shall not extend to any matter which would render it void pursuant to the Partnership Acts.13.2 Every Indemnified Person shall be indemnified out of the assets of the Partnership against all liabilities incurred by him byor by reason of any act done, conceived in or omitted in the conduct of the Partnership’s business or in the discharge of hisduties in defending any proceedings, whether civil or criminal, in which judgement is given in his favour, or in which he isacquitted, or in connection with any application under the Partnership Acts in which relief from liability is granted to himby the court.13.3 To the extent that any Indemnified Person is entitled to claim an indemnity pursuant to this Agreement in respect ofamounts paid or discharged by him, the relevant indemnity shall take effect as an obligation of the Partnership to reimbursethe person making such payment or effecting such discharge.3

13.4 Each Limited Partner agrees to waive any claim or right of action he or it may at any time have, whether individually or byor in the right of the Partnership, against any Indemnified Person on account of any action taken by such IndemnifiedPerson or the failure of such Indemnified Person to take any action in the performance of his duties with or for thePartnership PROVIDED HOWEVER that such waiver shall not apply to any claims or rights of action arising out of thefraud or dishonesty of such Indemnified Person or to recover any gain, personal profit or advantage to which suchIndemnified Person is not legally entitled.13.5 Expenses incurred in defending any civil or criminal action or proceeding for which indemnification is required pursuant tothis Agreement shall be paid by the Partnership in advance of the final disposition of such action or proceeding uponreceipt of an undertaking by or on behalf of the Indemnified Person to repay such amount if any allegation of fraud ordishonesty is proved against the Indemnified Person.13.6 No Indemnified Person shall be liable for the acts, defaults or omissions of any other Indemnified Person.14. AMENDMENTS.The General Partner may make any amendment, supplement, discharge, alteration or modification (an “Alteration”) of or tothis Agreement to reflect transfers of interests by Partners or Additional Limited Partners, the admission of substitute or newAdditional Limited Partners, the substitution or addition of a General Partner, or the modification of the interests of the Partnersor Additional Limited Partners. Any other provision of this Agreement may be amended, supplemented, altered, or discharged,and any provision hereof modified or waived, only by an instrument in writing signed by the General Partner; provided, howeverthat if such Alteration has a material adverse effect on the rights or interests of any Partner or Additional Limited Partner, suchAlteration shall be made only with the written consent of such Partner or Additional Limited Partner. No waiver of anyprovision hereof by any party hereto shall be deemed a waiver by any other party nor shall any such waiver by any party bedeemed a continuing waiver of any matter by such party.15. POWER OF ATTORNEY.The Limited Partner hereby irrevocably constitutes and appoints the General Partner or its designees its true and lawful attorney,in its name, place and stead to make, execute, acknowledge and file with the appropriate authority:15.1 any certificates and other instruments which may be required from time to time to be filed by the Partnership under thelaws of Bermuda or any other governmental authority having jurisdiction or which the General Partner shall deemadvisable, in its sole discretion, to file;4

15.2 any certificates or other instruments amending or modifying certificates or instruments of the Partnership to evidence anychanges therein provided for herein;15.3 any certificates or other instruments which may be required to effectuate the dissolution and termination of the Partnership;and15.4 any amendments to this Limited Partnership Agreement which the General Partner is authorised to make in accordancewith the provisions of this Limited Partnership Agreement.It being expressly understood and intended by such Limited Partner that such power of attorney is coupled with an interest. Theforegoing power of attorney shall be irrevocable.16. COUNTERPARTS.This Agreement may be executed in counterparts and it shall not be necessary that each counterpart be signed by each partyhereto so long as each party shall have executed and delivered a counterpart.17. GOVERNING LAW.This Agreement shall be governed by and construed and enforced in accordance with the laws in Bermuda.IN WITNESS WHEREOF, the undersigned have executed this Limited Partnership Agreement as of the date first above written.SIGNED by )for and on behalf of the General ) GENERAL PARTNERPartner in the presence of: ) 1648285 Alberta ULCBy:WitnessSIGNED by )for and on behalf of the Limited ) LIMITED PARTNERPartner in the presence of: ) Brookfield Asset Management Inc.By:Witness5

15.2 any certificates or other instruments amending or modifying certificates or instruments of the Partnership to evidence anychanges therein provided for herein;15.3 any certificates or other instruments which may be required to effectuate the dissolution and termination of the Partnership;and15.4 any amendments to this Limited Partnership Agreement which the General Partner is authorised to make in accordancewith the provisions of this Limited Partnership Agreement.It being expressly understood and intended by such Limited Partner that such power of attorney is coupled with an interest. Theforegoing power of attorney shall be irrevocable.16. COUNTERPARTS.This Agreement may be executed in counterparts and it shall not be necessary that each counterpart be signed by each partyhereto so long as each party shall have executed and delivered a counterpart.17. GOVERNING LAW.This Agreement shall be governed by and construed and enforced in accordance with the laws in Bermuda.IN WITNESS WHEREOF, the undersigned have executed this Limited Partnership Agreement as of the date first above written.SIGNED by )for and on behalf of the General )Partner in the presence of: ) GENERAL PARTNER1648285 Alberta ULCBy:WitnessSIGNED by )for and on behalf of the Limited ) LIMITED PARTNERPartner in the presence of: ) Brookfield Asset Management Inc.By: Cyrus Madon, Senior Managing PartnerWitness6

Exhibit 4.1MASTER PURCHASE AGREEMENTTHIS AGREEMENT is made the 11th day of April, 2012BETWEEN:Brookfield Property Partners L.P., a limited partnership formed under the laws of Bermuda(hereinafter called “BPY”)- and -Brookfield Asset Management Inc., a corporation incorporated under the laws of the Province of Ontario(hereinafter called “Brookfield”)RECITALS:A. Brookfield is considering launching BPY, which will be a public partnership focused on high quality commercial property, anddistributing to holders of its Class A limited voting shares and Class B limited voting shares a special dividend of limitedpartnership units of BPY (the “Spin-off”);B. management of Brookfield has prepared a registration statement on Form 20-F (the “Registration Statement”) and a preliminaryprospectus (the “Prospectus”), which incorporates the contents of the Registration Statement, to qualify the distribution of thelimited partnership units of BPY;C. the board of directors of Brookfield has approved the contents and the filing of the Registration Statement and the Prospectus;D. 1648285 Alberta ULC (the “BPY General Partner”) is the general partner of BPY;E. the BPY General Partner has approved the contents and the filing of the Registration Statement and the Prospectus;F. BPY is intending to file the Registration Statement in the United States and the Prospectus in Canada;G. BPY is a limited partner of Brookfield Property L.P., a newly formed limited partnership under the laws of Bermuda (the“Property Partnership”);

H. the assets and operations that will be indirectly held by the Property Partnership following the Spin-off are currently ownedindirectly by Brookfield, and will either be transferred to the Property Partnership or the Property Partnership will acquire aneconomic interest therein prior to closing of the Spin-off (the “reorganization”) as contemplated in the Registration Statement;andI. BPY and Brookfield wish to enter into this agreement to evidence their agreements regarding the reorganization.NOW THEREFORE in consideration of the mutual covenants and agreements herein contained and other good andvaluable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:1. InterpretationIn this Agreement, the following terms shall have the following meanings:1.1 “Agreement” means this master purchase agreement as it may be amended or restated;1.2 “Australian operations” means the interests in the Australian operations identified in Schedule 1, as amended from timeto time;1.3 “BPY General Partner” has the meaning given to it in the recitals;1.4 “current operations” means the interests identified in Schedule 1, as amended from time to time, other than the Australianoperations;1.5 “Property Partnership” has the meaning given to it in the recitals;1.6 “Prospectus” has the meaning given to it in the recitals;1.7 “Registration Statement” has the meaning given to it in the recitals;1.8 “reorganization” has the meaning given to it in the recitals; and1.9 “Spin-off” has the meaning given to it in the recitals.Other capitalized terms that are not defined herein have the meaning given to them in the Registration Statement.

2. Covenants to Complete the ReorganizationUpon the terms and subject to the conditions herein, Brookfield covenants that it will cause the Property Partnership toacquire from Brookfield, directly or indirectly, the current operations and Brookfield’s economic interest in the Australian operations.3. BPY’s Agreement to Acquire Interests in the Property PartnershipIn connection with the reorganization, BPY will acquire a limited partnership interest in the Property Partnership currentlyanticipated to be approximately 10%.4. Definitive Agreements to Complete the Reorganization4.1 The obligations under section 2 and section 3 of this Agreement are subject to all applicable board approvals beingobtained (including the approval by the board of directors of each of Brookfield and the BPY General Partner of thisAgreement and the transactions contemplated in the Registration Statement and the approval by the board of directors ofthe general partner of the general partner of the Property Partnership) and the appropriate entities entering into definitiveagreements to give effect to the transactions.4.2 The definitive agreements in respect of the Property Partnership’s acquisition of the current operations will contain therepresentations and warranties described below and other provisions such as covenants, indemnification and otherprovisions which are acceptable to the parties and which are customarily found in purchase agreements of the kindcontemplated by this Agreement, including the following:4.2.1 Purchase Price. The purchase price for the current operations will be the fair market value thereof, and will besatisfied by the Property Partnership directly or indirectly through the issuance of equity or debt or the payment of cash (orany combination thereof) to Brookfield or its affiliates, as applicable.4.2.2 Representations and warranties. The transfer agreements will contain representations and warranties concerning(i) organization and good standing, (ii) the authorization, execution, delivery and enforceability of the agreement and allagreements executed in connection therewith, and (iii) title to the securities being transferred to the Property Partnership.The agreements will not contain representations relating to the underlying assets and operations. The representations andwarranties of Brookfield will survive for a period of 18 months from the closing of the Spin-off.

4.2.3 Indemnity. The aggregate maximum liability of Brookfield under its representations, warranties and indemnities willbe limited, without duplication, to $1 billion.4.3 The completion of the closing of the reorganization will be subject to, inter alia, the satisfaction or waiver by the parties ofthe following conditions:4.3.1 A receipt having been received for the final prospectus of BPY.4.3.2 The declaration of effectiveness by the United States Securities and Exchange Commission of the RegistrationStatement having been received.4.3.3 Approvals having been obtained for the listing of the units of BPY on the New York Stock Exchange and the TorontoStock Exchange.4.3.4 All consents having been obtained and documentation entered into with respect to the transactions contemplatedhereby.4.3.5 All regulatory approvals having been obtained.4.3.6 There not having been threatened, instituted or pending any action or proceeding by any governmental entity, or byany other person in any jurisdiction before any governmental entity, (i) challenging or seeking to cease trade, or makeillegal, or delay or otherwise directly or indirectly restrain or prohibit the Spin-off, or (ii) that otherwise, in the solejudgment of Brookfield, acting reasonably, has or may have a material adverse effect on the trading in, or the value of, theunits of BPY.4.3.7 There not having occurred any change (including any proposal to amend applicable legislation or any announcement,governmental or regulatory initiative, issue of an interpretation bulletin, condition, event or development involving aprospective change) that, in the sole judgment of Brookfield, is detrimental to Brookfield or BPY or adversely affects theconsequences of the Spin-off for Brookfield’s shareholders, generally.4.4 The closing of the reorganization will be completed on or before the day on which the trading of the units of BPY beginson either the New York Stock Exchange or the Toronto Stock Exchange, whichever is earlier.

4.5 Brookfield and BPY will also, directly or indirectly, enter into ancillary agreements in connection with the Spin-off,including voting agreements, a master services agreement, a registration rights agreement, a licensing agreement and arelationship agreement, all on the terms described in the Registration Statement.5. Alternative Transaction StructureEach of the parties hereto shall endeavor to ensure that the reorganization is efficiently structured for financial, accounting,tax and regulatory purposes. In this regard, the parties shall work cooperatively and in good faith to complete the reorganization ascontemplated or to agree to modifications to the reorganization, including with respect to the structure or implementation thereof orthe assets and liabilities to be included therein, on mutually agreeable terms.6. ExpensesExcept as otherwise contemplated by a definitive agreement and other than the expenses in connection with the preparationand filing of the Registration Statement and the Prospectus, which will be paid by BPY, Brookfield will be responsible for theexpenses of the Spin-off and the reorganization, including any sales and goods and services taxes payable in respect of thetransactions contemplated hereby.7. CurrencyExcept where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in United Statesdollars.8. Further AssurancesEach of the parties hereto shall promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, allsuch further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of givingeffect to this Agreement and shall use reasonable efforts and take all such steps as may be reasonably within its power to implementto their full extent the provisions of this Agreement.9. Successors and AssignsNo party may assign its right or benefits under this Agreement without the prior written consent of the other party hereto.This provisions of this Agreement shall enure to the benefit of and be binding on the parties to this Agreement and their respectivesuccessors and assigns.

10. Limited LiabilityBPY is a limited partnership formed under the laws of Bermuda, a limited partner of which is only liable for any of itsliabilities or any of its losses to the extent of the amount that the limited partner has contributed or agreed to contribute to its capitaland the limited partner’s pro rata share of any undistributed income.11. Governing LawThis agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the laws ofCanada applicable therein.12. CounterpartsThis Agreement may be signed in counterparts and each of such counterparts shall constitute an original document andsuch counterparts, taken together, shall constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have executed this agreement.BROOKFIELD PROPERTY PARTNERS L.P.,by its general partner, 1648285 ALBERTA ULCby: /s/ Richard B. ClarkName: Richard B. ClarkTitle: DirectorBROOKFIELD ASSET MANAGEMENT INC.by: /s/ Jeffrey M. BlidnerName: Jeffrey M. BlidnerTitle: Senior Managing Partner

SCHEDULE 1Current OperationsOperation Investment to be Transferred Economic InterestBrookfield Office Properties Inc. Common shares and preferred shares 50.1%DS Four Limited Shares 100.0%Canary Wharf Group plc Ordinary shares 22.0%BREF loan from Brookfield Europe (Gibraltar) Loan 100%LimitedBrookfield Brazil Retail Fund Limited partnership interests 35.0%Brookfield Brazil Higienopolis Inc. Shares 42.0%Brookfield Real Estate Opportunity Fund I Limited partnership interests 55.8%Brookfield Real Estate Opportunity Fund II Limited partnership interests 28.8%Brookfield Real Estate Finance Fund I Series A membership interests 32.2%Brookfield Real Estate Finance Fund I Series B membership interests 25.5%Brookfield Real Estate Finance Fund I Series B membership interests 6.7%Brookfield Real Estate Finance Fund II Membership interests 13.8%Brookfield Real Estate Finance Fund II Membership interests 13.8%Brookfield Real Estate Finance Fund III Limited partnership interests 23.9%General Growth Properties, Inc. Common shares and warrants 9.2%General Growth Properties, Inc. Common shares 10.7%Howard Hughes Company Common shares and warrants 2.0%Rouse Properties, Inc. Common shares 36.5%Rouse credit facility with Brookfield FinanceLoan 100.0%Luxembourg SarlTexas Multifamily Limited partnership interests 30.5%Multifamily Value Add Fund Limited partnership interests 27.5%Legacy (Brookfield RETIP L LP LLC) Membership interests 24.3%Brookfield Colonial Holdings LP Limited partnership interests 9.6%Brookfield Industrial Partners LP Limited partnership interests 41.0%Australian Operations See below See below11All percentages listed represent the economic interest in the applicable entity or groups of assets to be transferred to BPY on agross fully diluted basis.

The Australian Operations are comprised of:OperationOwnershipInterest/PercentageMultiplex European Property Fund 25.0%Multiplex New Zealand Property Fund 44.3%Brookfield Australian Opportunities Fund 61.9%PCEC Medina Management Contract 100.0%Jessie St. Centre 100.0%Fujitsu Centre 100.0%Sydney Water Headquarters 100.0%AMP Place 100.0%CBA 100.0%ANZ Centre 50.0%Alinga Street 100.0%The Foundry 100.0%Bouquet Street Development 100.0%Bathurst Street Development 100.0%Carole Park 100.0%Great Western Super Centre 100.0%Peach Quarry 100.0%Luna Park 100.0%Woolloomooloo Car Park 50.0%Rosehill 100.0%Dee Why Town Centre 100.0%SCHEDULE 1 – Page ii

Exhibit 4.2BROOKFIELD ASSET MANAGEMENT INC.- and -BROOKFIELD PROPERTY PARTNERS L.P.- and -BROOKFIELD PROPERTY L.P.- and -each of the Managers that has executed this Agreement on Schedule A hereto- and -each of the Holding Entities that has executed this Agreement on Schedule B heretoFORM OF MASTER SERVICES AGREEMENT, 2012

TABLE OF CONTENTSARTICLE 1INTERPRETATION 11.1 Definitions 11.2 Headings and Table of Contents 61.3 Interpretation 61.4 Actions by the Managers or the Service Recipients 71.5 Generally Accepted Accounting Principles 71.6 Invalidity of Provisions 71.7 Entire Agreement 71.8 Waiver, Amendment 81.9 Governing Law 8ARTICLE 2APPOINTMENT OF THE MANAGERS 82.1 Appointment and Acceptance 82.2 Other Holding Entities 82.3 Other Managers 92.4 Subcontracting and Other Arrangements 9ARTICLE 3SERVICES AND POWERS OF THE MANAGERS 93.1 Services 93.2 Services Provided to BPY and the Property Partnership 103.3 Supervision of the Managers’ Activities 113.4 Restrictions on the Managers 113.5 Errors and Omissions Insurance 11ARTICLE 4RELATIONSHIP BETWEEN THE MANAGERS AND THE SERVICE RECIPIENTS 114.1 Other Activities 114.2 Exclusivity 124.3 Independent Contractor, No Partnership, Joint Venture or Agency 12ARTICLE 5MANAGEMENT AND EMPLOYEES 125.1 Management and Employees 12ARTICLE 6INFORMATION AND RECORDS 136.1 Books and Records 136.2 Examination of Records by the Service Recipients 136.3 Access to Information by Manager Group 136.4 Additional Information 14ARTICLE 7FEES AND EXPENSES 147.1 Base Management Fee 14

7.2 Computation and Payment of Base Management Fee 147.3 Failure to Pay When Due 157.4 Amendment to the Fee Amount 157.5 Expenses 157.6 Governmental Charges 167.7 Computation and Payment of Expenses and Governmental Charges 16ARTICLE 8BROOKFIELD’S OBLIGATION 17ARTICLE 9REPRESENTATIONS AND WARRANTIES OF THE MANAGERS AND THE SERVICE RECIPIENTS 179.1 Representations and Warranties of the Managers 179.2 Representations and Warranties of the Service Recipients 18ARTICLE 10LIABILITY AND INDEMNIFICATION 1810.1 Indemnity 1810.2 Limitation of Liability 2010.3 Benefit to all Indemnified Parties 20ARTICLE 11TERM AND TERMINATION 2011.1 Term 2011.2 Termination by the Service Recipients 2011.3 Termination by the Managers 2111.4 Survival Upon Termination 2211.5 Action Upon Termination 2211.6 Release of Money or other Property Upon Written Request 23ARTICLE 12GENERAL PROVISIONS 2312.1 Limited Liability of Limited Partners 2312.2 Assignment 2312.3 Enurement 2412.4 Notices 2412.5 Further Assurances 2512.6 Counterparts 25-ii -

MASTER SERVICES AGREEMENTTHIS AGREEMENT made as of the day of , 2012.BETWEEN:BROOKFIELD ASSET MANAGEMENT INC. (“Brookfield”), a corporation existing under the laws of theProvince of Ontario- and -BROOKFIELD PROPERTY PARTNERS L.P. (“BPY”), an exempted limited partnership existing under thelaws of Bermuda- and -BROOKFIELD PROPERTY L.P. (the “Property Partnership”), an exempted limited partnership existing underthe laws of Bermuda- and -each of the Managers (as defined below)- and -each of the Holding Entities (as defined below)RECITALS:A. The Service Recipients (as defined below) directly or indirectly hold interests in commercial property assets and will directlyor indirectly acquire, from time to time, interests in other commercial property assets; andB. BPY, the Property Partnership and the Holding Entities (as defined below) wish to engage the Managers to provide or arrangefor other Service Providers (as defined below) to provide to the Service Recipients certain management and administration services,subject to the terms and conditions of this Agreement, and the Managers wish to accept such engagement.NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and othergood and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:1.1 DefinitionsARTICLE 1INTERPRETATIONIn this Agreement, except where the context otherwise requires, the following terms will have the following meanings:1.1.1 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or moreintermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person;

1.1.2 “Agreement” means this Master Services Agreement;1.1.3 “Available Cash” means all cash and cash equivalents of the BPY Group available for distribution by the ServiceRecipients determined at the sole discretion of the BPY General Partner, which, for greater certainty, (i) may not in all casesequal an amount of cash held by the Service Recipients after the payment of expenses, debt service obligations on anyindebtedness and any other expense or reserve for any liability, working capital or capital expenditure and (ii) may include cashthat has been borrowed by any of the Service Recipients;1.1.4 “Base Management Fee” means the base management fee, calculated quarterly in arrears, equal to 25% of the FeeAmount;1.1.5 “BPY” has the meaning assigned thereto in the preamble;1.1.6 “BPY General Partner” means Brookfield Property Partners Limited, which is the general partner of BPY;1.1.7 “BPY Group” means BPY, the Property Partnership, the Holding Entities, the Operating Entities and any other direct orindirect Subsidiary of a Holding Entity;1.1.8 “Brookfield” has the meaning assigned thereto in the preamble;1.1.9 “Brookfield Fund” means any private investment entity, managed account, joint venture, consortium, partnership orinvestment fund established, sponsored or managed by a member of the Brookfield Group;1.1.10 “Brookfield Group” means Brookfield, any of its Affiliates and any Brookfield Fund, but excludes any member of theBPY Group;1.1.11 “Business Day” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda,the Province of Ontario, or the State of New York;1.1.12 “Claims” has the meaning assigned thereto in Section 10.1.1;1.1.13 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controlsanother Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example,the status of A being the general partner of B) or by virtue of the beneficial ownership of or control over a majority of the votinginterests in B; and, for greater certainty and without limitation, if A owns or has control over shares or other securities to whichare attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B, or A is thegeneral partner of B, a limited partnership, then in each case A Controls B for this purpose; and the term “Controlled” has thecorresponding meaning;1.1.14 “Effective Date” means the date of the Spin-Off;-2 -

1.1.15 “Equity Enhancement Distribution” has the meaning assigned thereto in Section 7.4;1.1.16 “Expense Statement” has the meaning assigned thereto in Section 7.7;1.1.17 “Expenses” has the meaning assigned thereto in Section 7.5.2;1.1.18 “Fair Market Value” means, with respect to a Unit, (i) if such Unit is listed on a stock exchange or public quotationsystem, the Trading Price of such Unit, or (ii) if such Unit is not listed on a stock exchange or public quotation system, the fairmarket value of such Unit determined by the Governing Body of the BPY General Partner;1.1.19 “Fee Amount” means an amount equal to $50 million, which amount shall be adjusted for inflation annually beginningon January 1, 2014 at the Inflation Factor;1.1.20 “Governing Body” means (i) with respect to a corporation or limited company, the board of directors of such corporationor limited company, (ii) with respect to a limited liability company, the manager(s) or managing partner(s) of such limitedliability company, (iii) with respect to a partnership, the board, committee or other body of each general partner or managingpartner of such partnership, that serves a similar function (or if any such general partner or managing partner is itself apartnership, the board, committee or other body of such general or managing partner’s general or managing partner that serves asimilar function), and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in thecase of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such bodyhas delegated any power or authority, including any officer or managing director;1.1.21 “Governing Instruments” means (i) the Memorandum of Association and Bye-laws in the case of any exemptedcompany existing under the Laws of Bermuda, (ii) the certificate of incorporation, amalgamation or continuance, as applicable,and by-laws in the case of a corporation, (iii) the memorandum and articles of association in the case of a limited company,(iv) the partnership agreement in the case of a partnership, (v) the articles of formation and operating agreement in the case of alimited liability company, (vi) the trust instrument in the case of a trust and (vii) any other similar governing document underwhich an entity was organized, formed or created or operates, including any conflict guidelines or protocols in place from timeto time;1.1.22 “Governmental Authority” means any (i) international, multinational, national, federal, provincial, state, regional,municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body,commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) self-regulatory organization or stock exchange,(iii) subdivision, agent, commission, board, or authority of any of the foregoing, or (iv) quasi-governmental or private bodyexercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;1.1.23 “Governmental Charge” has the meaning assigned thereto in Section 7.6;-3 -

1.1.24 “Holding Entities” means the entities that have executed this Agreement on Schedule B hereto and any direct whollyownedSubsidiary of the Property Partnership created or acquired after the date of this Agreement, excluding, for greatercertainty, any Operating Entities;1.1.25 “Indemnified Party” has the meaning assigned thereto in Section 10.1.1;1.1.26 “Indemnifying Party” has the meaning assigned thereto in Section 10.1.1;1.1.27 “Independent Committee” means a committee of the board of directors of the BPY General Partner made up ofdirectors that are “independent” of Brookfield and its Affiliates, in accordance with the BPY General Partner’s GoverningInstruments;1.1.28 “Inflation Factor” means, at any time, the fraction obtained where the numerator is the Consumer Price Index for theUnited States of America (all items) for the then current year and the denominator is the Consumer Price Index for the UnitedStates of America (all items) for the year immediately preceding the then current year, with appropriate mathematicaladjustment made to ensure that both the numerator and the denominator have been prepared on the same basis;1.1.29 “Interest Rate” means, for any day, the rate of interest equal to the overnight U.S. dollar London interbank offered rateon such day;1.1.30 “Laws” means any and all applicable (i) laws, constitutions, treaties, statutes, codes, ordinances, principles of commonand civil law and equity, rules, regulations and municipal by-laws, whether domestic, foreign or international, (ii) judicial,arbitral, administrative, ministerial, departmental and regulatory judgments, orders, writs, injunctions, decisions, and awards ofany Governmental Authority, and (iii) policies, practices and guidelines of any Governmental Authority which, although notactually having the force of law, are considered by such Governmental Authority as requiring compliance as if having the forceof law; and the term “applicable”, with respect to such Laws and in the context that refers to one or more Persons, means suchLaws that apply to such Person or Persons or its or their business, undertaking, property or securities at the relevant time andthat emanate from a Governmental Authority having jurisdiction over the Person or Persons or its or their business, undertaking,property or securities;1.1.31 “Liabilities” has the meaning assigned thereto in Section 10.1.1;1.1.32 “Managers” means the entities that have executed this Agreement on Schedule A hereto and any other Affiliate ofBrookfield that is appointed from time to time to act as a manager pursuant to this Agreement;1.1.33 “Manager Group” means the Managers and any other Service Providers;1.1.34 “Operating Entities” means, from time to time, the Persons in which the Service Recipients hold interests and that(i) directly hold real estate assets, or (ii) indirectly hold real estate assets but all of the interests of which are not held by theService Recipients, other than, in the case of each of (i) and (ii), any Person in which the Service Recipients hold interests forinvestment purposes only of less than 5% of the outstanding equity securities of that Person;-4 -

1.1.35 “Permit” means any consent, license, approval, registration, permit or other authorization granted by any GovernmentalAuthority;1.1.36 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture,syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimitedliability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personalrepresentative, Governmental Authority or other entity however designated or constituted and pronouns have a similarlyextended meaning;1.1.37 “Principal Exchange” means the principal stock exchange or public quotation system (determined on the basis ofaggregate trading volume for the prior four months) on which the Units are listed;1.1.38 “Property General Partner” means Brookfield Property General Partner Limited, which is the general partner ofProperty GP LP;1.1.39 “Property GP LP” means Brookfield Property GP L.P., which is the general partner of the Property Partnership;1.1.40 “Property Partnership” has the meaning assigned thereto in the preamble;1.1.41 “Property Partnership Units” means the limited partnership units of the Property Partnership;1.1.42 “Quarter” means a calendar quarter ending on the last day of March, June, September or December;1.1.43 “Relationship Agreement” means the agreement dated as of the date hereof entered into among BPY, the PropertyPartnership, the Holding Entities, Brookfield and the Managers that governs aspects of the relationship among them;1.1.44 “Service Providers” means the Managers and any member of the Brookfield Group that the Managers have arranged toprovide the Services to any Service Recipient;1.1.45 “Service Recipients” means BPY, the Property Partnership, the Holding Entities and, at the option of the HoldingEntities, any wholly-owned Subsidiary of a Holding Entity, excluding, for greater certainty, any Operating Entities;1.1.46 “Services” has the meaning assigned thereto in Section 3.1;1.1.47 “Spin-Off” means the distribution by Brookfield of its interests in BPY to the shareholders of Brookfield;-5 -

1.1.48 “Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by suchPerson, (ii) any trust in which such Person holds all of the beneficial interests, or (iii) any partnership, limited liability companyor similar entity in which such Person holds all of the interests other than the interests of any general partner, managing memberor similar Person;1.1.49 “Third Party Claim” has the meaning assigned thereto in Section 10.1.2;1.1.50 “Trading Price” means, in any Quarter, with respect to any Unit that is listed on a stock exchange or public quotationsystem, the volume-weighted average trading price of such Unit on the Principal Exchange for the five trading days ending onthe last trading day of such Quarter; provided that where the Trading Price of such Unit is calculated in any currency other thanU.S. dollars, such amount will be converted to U.S. dollars for purposes of this Agreement in accordance with the applicableexchange rate, as determined by the Managers acting reasonably; and1.1.51 “Units” means the limited partnership units of BPY.1.2 Headings and Table of ContentsThe inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will notaffect the construction or interpretation hereof.1.3 InterpretationIn this Agreement, unless the context otherwise requires:1.3.1 words importing the singular will include the plural and vice versa, words importing gender will include all genders or theneuter, and words importing the neuter will include all genders;1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, arenot to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items ormatters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of thegeneral term or statement;1.3.3 references to any Person include such Person’s successors and permitted assigns;1.3.4 except as otherwise provided in this Agreement, any reference in this Agreement to a statute, regulation, policy, rule orinstrument will include, and will be deemed to be a reference also to, all rules and regulations made under such statute, in thecase of a statute, to all amendments made to such statute, regulation, policy, rule or instrument, and to any statute, regulation,policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation,policy, rule or instrument so referred to;-6 -

1.3.5 any reference to this Agreement or any other agreement, document or instrument will be construed as a reference to thisAgreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from timeto time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not aBusiness Day, then such amount will be determined or such action will be required to be taken at or before the requisite time onthe next succeeding day that is a Business Day; and1.3.7 except where otherwise expressly provided, all amounts in this Agreement are stated and will be paid in U.S. currency.1.4 Actions by the Managers or the Service RecipientsUnless the context requires otherwise, where the consent of or a determination is required by any Manager or ServiceRecipient hereunder, the parties will be entitled to conclusively rely upon it having been given or taken, as applicable, if, suchManager or Service Recipient, as applicable, has communicated the same in writing.1.5 Generally Accepted Accounting PrinciplesIn this Agreement, references to “generally accepted accounting principles” mean the generally accepted accountingprinciples used by BPY in preparing its financial statements from time to time.1.6 Invalidity of ProvisionsEach of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity orunenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceabilityof any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders anyprovision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace anyprovision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes asclose as possible to that of the invalid or unenforceable provision which it replaces.1.7 Entire AgreementThis Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement.There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements inconnection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on anywarranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into thisAgreement, or any amendment or supplement hereto, by any party to this Agreement or its directors, officers, employees or agents, toany other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced towriting and included as a term of this Agreement, and-7 -

none of the parties to this Agreement has been induced to enter into this Agreement or any amendment or supplement hereto byreason of any such warranty, representation, opinion, advice or assertion of fact. Accordingly, there will be no liability, either in tortor in contract, assessed in relation to any such warranty, representation, opinion, advice or assertion of fact, except to the extentcontemplated above.1.8 Waiver, AmendmentExcept as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unlessexecuted in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of anyother provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expresslyprovided. A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single orpartial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right.1.9 Governing LawThis Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontarioand the federal laws of Canada applicable therein. Each party irrevocably attorns and submits to the non-exclusive jurisdiction of theOntario courts situated in the City of Toronto and waives objection to the venue of any proceeding in such court or any argument thatsuch court provides an inconvenient forum.ARTICLE 2APPOINTMENT OF THE MANAGERS2.1 Appointment and Acceptance2.1.1 Subject to and in accordance with the terms, conditions and limitations in this Agreement, the Service Recipients herebyappoint the Managers to provide or arrange for other Service Providers to provide the Services to the Service Recipients. Thisappointment will be subject to each Service Recipient’s Governing Body’s supervision of the Managers and obligation tomanage and control the affairs of such Service Recipient.2.1.2 The Managers hereby accept the appointment provided for in Section 2.1.1 and agree to act in such capacity and to provideor arrange for other Service Providers to provide the Services to the Service Recipients upon the terms, conditions andlimitations in this Agreement.2.2 Other Holding EntitiesThe parties acknowledge that any Holding Entity that is not a party to this Agreement will execute a counterpart of thisAgreement agreeing to be bound by the terms of this Agreement.-8 -

2.3 Other ManagersThe Managers may, from time to time, appoint an Affiliate of Brookfield to act as a new Manager under this Agreement,effective upon the execution of a joinder agreement by the new Manager in the form set forth on Schedule C hereto.2.4 Subcontracting and Other ArrangementsThe Managers may subcontract to any other Service Provider or any of its other Affiliates, or arrange for the provision ofany or all of the Services to be provided by it under this Agreement by any other Service Provider or any other of its Affiliates, andthe Service Recipients hereby consent to any such subcontracting or arrangement; provided that the Managers will remain responsibleto the Service Recipients for any Services provided by such other Service Provider or Affiliate.ARTICLE 3SERVICES AND POWERS OF THE MANAGERS3.1 ServicesThe Managers will provide or arrange for the provision by other Service Providers of, and will have the exclusive powerand authority to provide or arrange for the provision by other Service Providers of, the following services (the “Services”) to theService Recipients:3.1.1 causing or supervising the carrying out of all day-to-day management, secretarial, accounting, banking, treasury,administrative, liaison, representative, regulatory and reporting functions and obligations;3.1.2 providing overall strategic advice to the Holding Entities including advising with respect to the expansion of their businessinto new markets;3.1.3 supervising the establishment and maintenance of books and records;3.1.4 identifying, evaluating and recommending to the Holding Entities acquisitions or dispositions from time to time and, whererequested to do so, assisting in negotiating the terms of such acquisitions or dispositions;3.1.5 recommending and, where requested to do so, assisting in the raising of funds whether by way of debt, equity or otherwise,including the preparation, review or distribution of any prospectus or offering memorandum in respect thereof and assisting withcommunications support in connection therewith;3.1.6 recommending to the Holding Entities suitable candidates to serve on the Governing Bodies of the Operating Entities;3.1.7 making recommendations with respect to the exercise of any voting rights to which the Holding Entities are entitled inrespect of the Operating Entities;-9 -

3.1.8 making recommendations with respect to the payment of dividends by the Holding Entities or any other distributions bythe Service Recipients, including distributions by BPY to its unitholders;3.1.9 monitoring and/or oversight of the applicable Service Recipient’s accountants, legal counsel and other accounting,financial or legal advisors and technical, commercial, marketing and other independent experts and managing litigation in whicha Service Recipient is sued or commencing litigation after consulting with, and subject to the approval of, the relevantGoverning Body;3.1.10 attending to all matters necessary for any reorganization, bankruptcy proceedings, dissolution or winding up of a ServiceRecipient, subject to approval by the relevant Governing Body;3.1.11 supervising the making of all tax elections, determinations and designations, the timely calculation and payment of taxespayable and the filing of all tax returns due, by each Service Recipient;3.1.12 causing or supervising the preparation of the Service Recipients’ annual consolidated financial statements, quarterlyinterim financial statements and other public disclosure;3.1.13 making recommendations in relation to and effecting the entry into insurance of each Service Recipient’s assets, togetherwith other insurances against other risks, including directors and officers insurance, as the relevant Service Provider and therelevant Governing Body may from time to time agree;3.1.14 arranging for individuals to carry out the functions of the principal executive, accounting and financial officers for BPYonly for purposes of applicable securities laws;3.1.15 providing individuals to act as senior officers of the Holding Entities as agreed from time to time, subject to the approvalof the relevant Governing Body;3.1.16 advising the Service Recipients regarding the maintenance of compliance with applicable Laws and other obligations; and3.1.17 providing all such other services as may from time to time be agreed with the Service Recipients that are reasonablyrelated to the Service Recipient’s day-to-day operations.3.2 Services Provided to BPY and the Property Partnership3.2.1 Notwithstanding any provision herein to the contrary, the Managers other than BGRE Partners LP shall solely beresponsible for the provision of Services to BPY and the Property Partnership. BGRE Partners LP shall not be responsible forthe provision of any Services to BPY and the Property Partnership.-10 -

3.2.2 For greater certainty and notwithstanding any other provision herein in the contrary, any Services provided to the PropertyPartnership in connection with any securities, whether equity or debt, of Brookfield BPY Holdings (Canada) Inc. that are heldby the Property Partnership shall be provided by a Manager other than BGRE Partners LP or an Affiliate of such Manager that isnot resident in Canada with whom such Manager has made arrangements for the provision of such Services or to whom suchManager has sub-contracted the provision of such Services.3.3 Supervision of the Managers’ ActivitiesThe Managers will, at all times, be subject to the supervision of the relevant Service Recipient’s Governing Body and willonly provide or arrange for the provision of such Services as such Governing Body may request from time to time.3.4 Restrictions on the Managers3.4.1 The Managers will, and will cause any other Service Provider to, refrain from taking any action that is not in compliancewith or would violate any Laws or that otherwise would not be permitted by the Governing Instruments of the ServiceRecipients. If any Manager or any Service Provider is instructed to take any action that is not in such compliance by a ServiceRecipient’s Governing Body, such person will promptly notify such Governing Body of its judgment that such action would notcomply with or violate any such Laws or otherwise would not be permitted by such Governing Instrument.3.4.2 In performing its duties under this Agreement, each member of the Manager Group will be entitled to rely in good faith onqualified experts, professionals and other agents (including on accountants, appraisers, consultants, legal counsel and other,professional advisors) and will be permitted to rely in good faith upon the direction of a Service Recipient’s Governing Body toevidence any approvals or authorizations that are required under this Agreement. All references in this Agreement to the ServiceRecipients or Governing Body for the purposes of instructions, approvals and requests to the Managers will refer to theGoverning Body.3.5 Errors and Omissions InsuranceThe Managers will, and will cause, any other Service Provider to, at all times during the term of this Agreement maintain“errors and omissions” insurance coverage and other insurance coverage which is customarily carried by Persons performingfunctions that are similar to those performed by the Service Providers under this Agreement and in an amount which is comparable tothat which is customarily maintained by such other Persons.ARTICLE 4RELATIONSHIP BETWEEN THE MANAGERS AND THE SERVICE RECIPIENTS4.1 Other ActivitiesSubject to the terms of the Relationship Agreement, no member of the Manager Group (and no Affiliate, director, officer,member, partner, shareholder or employee of any-11 -

member of the Manager Group) will be prohibited from engaging in other business activities or sponsoring, or providing services to,third parties that compete directly or indirectly with the Service Recipients.4.2 ExclusivityThe Service Recipients will not, during the term of this Agreement, engage any other Person to provide any servicescomparable to the Services without the prior written consent of the Managers, which may be withheld in the absolute discretion of theManagers.4.3 Independent Contractor, No Partnership, Joint Venture or AgencyThe parties acknowledge that the Managers are providing or arranging for the provision of the Services hereunder asindependent contractors and that the Service Recipients and the Managers are not partners or joint venturers with or agents of eachother, and nothing herein will be construed so as to make them partners, joint venturers or agents or impose any liability as such onany of them as a result of this Agreement; provided however that nothing herein will be construed so as to prohibit the ServiceRecipients and the Managers from embarking upon an investment together as partners, joint venturers or in any other mannerwhatsoever.ARTICLE 5MANAGEMENT AND EMPLOYEES5.1 Management and Employees5.1.1 The Managers will arrange, or will arrange for another member of the Manager Group to arrange, for such qualifiedpersonnel and support staff to be available to carry out the Services. Such personnel and support staff will devote such of theirtime to the provision of the Services to the Service Recipients as the relevant member of the Manager Group reasonably deemsnecessary and appropriate in order to fulfill its obligations hereunder. Such personnel and support staff need not have as theirprimary responsibility the provision of the Services to the Service Recipients or be dedicated exclusively to the provision of theServices to the Service Recipients.5.1.2 Each of the Service Recipients will do all things reasonably necessary on its part as requested by any member of theManager Group consistent with the terms of this Agreement to enable the members of the Manager Group to fulfill theirobligations, covenants and responsibilities and to exercise their rights pursuant to this Agreement, including making available tothe Manager Group, and granting the Manager Group access to, the employees and contractors of the Service Recipients as anymember of the Manager Group may from time to time request.-12 -

ARTICLE 6INFORMATION AND RECORDS6.1 Books and Records6.1.1 The Managers will, or will cause any other member of the Manager Group to, as applicable, maintain proper books,records and documents in which complete, true and correct entries, in conformity in all material respects with generally acceptedaccounting principles and all requirements of applicable Laws, will be made.6.1.2 The Service Recipients will maintain proper books, records and documents in which complete, true and correct entries, inconformity in all material respects with generally accepted accounting principles and all requirements of applicable Laws, willbe made.6.2 Examination of Records by the Service RecipientsUpon reasonable prior notice by the Service Recipients to the relevant member of the Manager Group, the relevant memberof the Manager Group will make available to the Service Recipients and their authorized representatives, for examination duringnormal business hours on any Business Day, all books, records and documents required to be maintained under Section 6.1.1. Inaddition, the Manager Group will make available to the Service Recipients or their authorized representatives such financial andoperating data in respect of the performance of the Services under this Agreement as may be in existence and as the ServiceRecipients or their authorized representatives may from time to time reasonably request, including for the purposes of conducting anyaudit in respect of expenses of the Service Recipients or other matters necessary or advisable to be audited in order to conduct anaudit of the financial affairs of the Service Recipients. Any examination of records will be conducted in a manner which will notunduly interfere with the conduct of the Service Recipients’ activities or of the Manager Group’s business in the ordinary course.6.3 Access to Information by Manager Group6.3.1 The Service Recipients will:6.3.1.1 grant, or cause to be granted, to the Manager Group full access to all documentation and information, including allof the books, records, documents and financial and operating data of the Service Recipients required to be maintainedunder Section 6.1.2, necessary in order for the Manager Group to perform its obligations, covenants and responsibilitiespursuant to the terms hereof and to enable the Manager Group to provide the Services; and6.3.1.2 provide, or cause to be provided, all documentation and information as may be reasonably requested by anymember of the Manager Group, and promptly notify the appropriate member of the Manager Group of any material facts orinformation of which the Service Recipients is aware, including any known, pending or threatened suits, actions, claims,proceedings or orders by or against any member of the BPY Group before any Governmental Authority, that-13 -

may affect the performance of the obligations, covenants or responsibilities of the Manager Group pursuant to thisAgreement, including the maintenance of proper financial records.6.4 Additional InformationThe parties acknowledge and agree that conducting the activities and providing the Services contemplated herein may havethe incidental effect of providing additional information which may be utilized with respect to, or may augment the value of, businessinterests and related assets in which any Service Provider or any of its Affiliates has an interest and that, subject to compliance withthis Agreement, none of the Service Providers or any of their respective Affiliates will be liable to account to the Service Recipientswith respect to such activities or results; provided, however, that the relevant Service Provider will not (and will cause its Affiliatesnot to), in making any use of such additional information, do so in any manner that the relevant Service Provider or any of itsAffiliates knows, or ought reasonably to know, would cause or result in a breach of any confidentiality provision of agreements towhich any Service Recipient is a party or is bound.ARTICLE 7FEES AND EXPENSES7.1 Base Management FeeThe Service Recipients hereby agree to pay as provided by this Article 7, during the term of this Agreement, the BaseManagement Fee, quarterly in arrears. The Base Management Fee will accrue commencing on the date hereof and will be pro-ratedbased on the number of days during the first Quarter in which this Agreement is in effect.7.2 Computation and Payment of Base Management Fee7.2.1 The Managers or another Service Provider will compute each instalment and allocation of the Base Management Fee assoon as practicable, but in any event no later than five Business Days, following the end of the Quarter with respect to whichsuch instalment is payable. A copy of the computations and allocations made will thereafter, for informational purposes only,promptly be delivered to each Service Recipient by the relevant Service Provider upon request. Payment of the BaseManagement Fee for any Quarter (whether in cash, Units, Property Partnership Units or any combination of the foregoing) willbe due and payable no later than the 45th day following the end of such Quarter.7.2.2 For any Quarter in which the BPY General Partner determines that the Service Recipients have insufficient Available Cashto pay the Base Management Fee as well as the next regular distribution on Units, the Service Recipients may elect to pay all ora portion of the Base Management Fee payable in such Quarter in Units or Property Partnership Units, provided that (i) any suchelection will be made within 45 days following the end of the applicable Quarter, and (ii) no such payment will be made inProperty Partnership Units without the written consent of the Managers. If the Service-14 -

Recipients elect to pay all or a portion of the Base Management Fee in Units or Property Partnership Units, BPY or the PropertyPartnership, as applicable, will issue, and the applicable Manager hereby agrees to acquire, Units or Property Partnership Units,as applicable, equal to the portion of the Base Management Fee elected to be paid in Units or Property Partnership Units dividedby the Fair Market Value of a Unit on the date the Service Recipients make such election (provided that no fractional Units orProperty Partnership Units will be issued, and such number will be rounded down to the nearest whole number with theremainder payable to the Managers in cash). In such case, BPY or the Property Partnership, as applicable, shall apply suchpayment against the subscription price for such Units or Property Partnership Units, as applicable.7.2.3 If the Service Recipients elect to pay all or any portion of the Base Management Fee for any Quarter in Units or PropertyPartnership Units, the Service Recipients will take or cause to be taken all appropriate action to issue such Units or PropertyPartnership Units, as applicable, including any action required to ensure that such Units or Property Partnership Units, asapplicable, are issued in accordance with applicable Laws and listed on any applicable stock exchanges and public quotationsystems.7.3 Failure to Pay When DueAny amount payable by any Service Recipient to any member of the Manager Group hereunder which is not remitted whenso due will remain due (whether on demand or otherwise) and interest will accrue on such overdue amounts (both before and afterjudgment) at a rate per annum equal to the Interest Rate.7.4 Amendment to the Fee AmountThe parties acknowledge and agree that it may be desirable to increase the Fee Amount from time to time. The partiesagree to negotiate in good faith the amount of such increase, which increase (i) may only be made if Property GP LP is then entitledto receive an equity enhancement distribution under the limited partnership agreement of the Property Partnership (the “EquityEnhancement Distribution”), and (ii) will only be payable in a Quarter if and to the extent that the increase does not result in a netincrease in the Equity Enhancement Distribution and the adjusted Base Management Fee when taken together (as compared to theEquity Enhancement Distribution and Base Management Fee ignoring such increase).7.5 Expenses7.5.1 The Managers acknowledge and agree that the Service Recipients will not be required to reimburse any member of theManager Group for the salaries and other remuneration of the management, personnel or support staff who provide the Servicesto such Service Recipients or overhead for such persons.7.5.2 Each of the Service Recipients will reimburse the relevant member of the Manager Group for all out-of-pocket fees, costsand expenses, including those of any third party (other than those contemplated by Section 7.5.1) (“Expenses”), incurred by therelevant member of the Manager Group in connection with the provision of the Services. Such Expenses are expected to include,among other things:7.5.2.1 fees, costs and expenses relating to any debt or equity financing;-15 -

7.5.2.2 fees, costs and expenses incurred in connection with the general administration of any Service Recipient;7.5.2.3 taxes, licenses and other statutory fees or penalties levied against or in respect of a Service Recipient in respect ofServices;7.5.2.4 amounts owed by the relevant member of the Manager Group under indemnification, contribution or similararrangements;7.5.2.5 fees, costs and expenses relating to financial reporting, regulatory filings and investor relations and the fees, costsand expenses of agents, advisors and other Persons who provide Services to a Service Recipient;7.5.2.6 any other fees, costs and expenses incurred by the relevant member of the Manager Group that are reasonablynecessary for the performance by the relevant member of the Manager Group of its duties and functions under thisAgreement; and7.5.2.7 fees, costs and expenses incurred in connection with the investigation, acquisition, holding or disposal of any assetor business that is made or that is proposed to be made.7.6 Governmental ChargesWithout limiting Section 7.5, the Service Recipients will pay or reimburse the relevant member of the Manager Group forall sales taxes, use taxes, value added taxes, goods and services taxes, harmonized sales taxes, withholding taxes or other similartaxes, customs duties or other governmental charges (“Governmental Charges”) that are levied or imposed by any GovernmentalAuthority by reason of this Agreement or the fees or other amounts payable hereunder, except for any income taxes, corporationtaxes, capital taxes or other similar taxes payable by any member of the Manager Group which are personal to such member of theManager Group. Any failure by the Manager Group to collect monies on account of these Governmental Charges will not constitute awaiver of the right to do so.7.7 Computation and Payment of Expenses and Governmental ChargesFrom time to time the Managers will, or will cause the other Service Providers to, prepare statements (each an “ExpenseStatement”) documenting the Expenses and Governmental Charges to be reimbursed by the Service Recipients pursuant to thisArticle 7 and will deliver such statements to the relevant Service Recipient. All Expenses and Governmental Charges reimbursablepursuant to this Article 7 will be reimbursed by the relevant Service Recipient no later than the date which is 30 days after the receiptof an Expense Statement. The provisions of this Section 7.7 will survive the termination of this Agreement.-16 -

ARTICLE 8BROOKFIELD’S OBLIGATIONBrookfield’s sole obligation pursuant to this Agreement will be to use its commercially reasonable efforts to cause itsSubsidiaries (other than any member of the BPY Group) to provide Services to the Service Recipients, as applicable, in accordancewith the direction of the Managers. Brookfield’s obligations pursuant to this Article 8 shall terminate at such time that all of theManagers cease to be Affiliates of Brookfield.ARTICLE 9REPRESENTATIONS AND WARRANTIESOF THE MANAGERS AND THE SERVICE RECIPIENTS1.1 Representations and Warranties of the ManagersEach of the Managers (or, as applicable, its general partner on its behalf) hereby represents and warrants to the ServiceRecipients that:9.1.1 it (and, as applicable, its general partner) is validly organized and existing under the Laws governing its formation andexistence;9.1.2 it, or another Service Provider, holds such Permits necessary to perform its obligations hereunder and is not aware of anyreason why such Permits might be cancelled;9.1.3 it (or, as applicable, its general partner on its behalf) has the power, capacity and authority to enter into this Agreement andto perform its duties and obligations hereunder;9.1.4 it (or, as applicable, its general partner) has taken all necessary action to authorize the execution, delivery and performanceof this Agreement;9.1.5 the execution and delivery of this Agreement by it (or, as applicable, its general partner on its behalf) and the performanceby it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments(or, as applicable, the Governing Instruments of its general partner), or under any mortgage, lease, agreement or other legallybinding instrument, Permit or applicable Law to which it is a party or by which it or any of its properties or assets may bebound;9.1.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by it (or, as applicable, its general partner on its behalf) of this Agreement; and9.1.7 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms,subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of generalapplication limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity, includingstandards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability ofequitable remedies, whether such principles are considered in a proceeding at law or in equity.-17 -

9.2 Representations and Warranties of the Service RecipientsEach of the Service Recipients (or, as applicable, its general partner on its behalf) hereby represents and warrants to theManagers that:9.2.1 it (and, as applicable, its general partner) is validly organized and existing under the Laws governing its formation andexistence;9.2.2 it, or the relevant Operating Entity, holds such Permits necessary to own and operate the assets that it directly or indirectlyowns or operates from time to time and is not aware of any reason why such Permits might be cancelled;9.2.3 it (or, as applicable, its general partner on its behalf) has the power, capacity and authority to enter into this Agreement andto perform its duties and obligations hereunder;9.2.4 it (or, as applicable, its general partner) has taken all necessary action to authorize the execution, delivery and performanceof this Agreement;9.2.5 the execution and delivery of this Agreement by it (or, as applicable, its general partner on its behalf) and the performanceby it of its obligations hereunder do not and will not contravene, breach or result in any default under its Governing Instruments(or, if applicable, the Governing Instruments of its general partner), or under any mortgage, lease, agreement or other legallybinding instrument, Permit or applicable Law to which it is a party or by which any of its properties or assets may be bound;9.2.6 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by it (or, as applicable, its general partner on its behalf) of this Agreement; and9.2.7 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms,subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of generalapplication limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity, includingstandards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability ofequitable remedies, whether such principles are considered in a proceeding at law or in equity.ARTICLE 10LIABILITY AND INDEMNIFICATION10.1 Indemnity10.1.1 The Service Recipients (for the purposes of this Article 10, each an “Indemnifying Party”) hereby jointly and severallyagree, to the fullest extent permitted by applicable Laws, to indemnify and hold harmless each member of the Manager Group,any of its Affiliates (other than any member of the BPY Group) and any directors, officers, agents, subcontractors, contractors,delegates, members, partners, shareholders, employees and other representatives of each of the foregoing (each, an“Indemnified Party”) from-18 -

and against any claims, liabilities, losses, damages, costs or expenses (including legal fees) (“Liabilities”) incurred by them orthreatened in connection with any and all actions, suits, investigations, proceedings or claims of any kind whatsoever, whetherarising under statute or action of a Governmental Authority or otherwise or in connection with the business, investments andactivities of the Service Recipients or in respect of or arising from this Agreement or the Services provided hereunder(“Claims”), including any Claims arising on account of the Governmental Charges contemplated by Section 7.6; provided thatno Indemnified Party will be so indemnified with respect to any Claim to the extent that such Claim is finally determined by afinal and non-appealable judgment entered by a court of competent jurisdiction, or pursuant to a settlement agreement agreed toby such Indemnified Party, to have resulted from such Indemnified Party’s bad faith, fraud, wilful misconduct, gross negligenceor, in the case of a criminal matter, conduct undertaken with knowledge that the conduct was unlawful.10.1.2 The Managers and the Service Recipients agree that if any action, suit, investigation, proceeding or Claim is made orbrought by any third party with respect to which an Indemnifying Party is obligated to provide indemnification under thisAgreement (a “Third Party Claim”), the Indemnified Party will have the right to employ its own counsel in connectiontherewith, and the reasonable fees and expenses of such counsel, as well as the reasonable costs (excluding an amountreimbursed to such Indemnified Party for the time spent in connection therewith) and out of pocket expenses incurred inconnection therewith will be paid by the Indemnifying Party in such case, as incurred but subject to recoupment by theIndemnifying Party if ultimately it is not liable to pay indemnification hereunder.10.1.3 The Managers and the Service Recipients agree that, promptly after the receipt of notice of the commencement of anyThird Party Claim, the Indemnified Party in such case will notify the Indemnifying Party in writing of the commencement ofsuch Third Party Claim (provided that any accidental failure to provide any such notice will not prejudice the right of any suchIndemnified Party hereunder) and, throughout the course of such Third Party Claim, such Indemnified Party will use its bestefforts to provide copies of all relevant documentation to such Indemnifying Party and will keep the Indemnifying Partyapprised of the progress thereof and will discuss with the Indemnifying Party all significant actions proposed.10.1.4 The parties hereto expressly acknowledge and agree that the right to indemnity provided in this Section 10.1 will be inaddition to and not in derogation of any other liability which the Indemnifying Party in any particular case may have or of anyother right to indemnity or contribution which any Indemnified Party may have by statute or otherwise at law.10.1.5 The indemnity provided in this Section 10.1 will survive the completion of Services rendered under, or any termination orpurported termination of, this Agreement.-19 -

10.2 Limitation of Liability10.2.1 The Managers assume no responsibility under this Agreement other than to render the Services in good faith and will notbe responsible for any action of a Service Recipient’s Governing Body in following or declining to follow any advice orrecommendations of the relevant Service Provider, including as set forth in Section 3.3 hereof.10.2.2 The Service Recipients hereby agree that no Indemnified Party will be liable to a Service Recipient, a Service Recipient’sGoverning Body (including, for greater certainty, a director or officer of a Service Recipient or another individual with similarfunction or capacity) or any security holder or partner of a Service Recipient for any Liabilities that may occur as a result of anyacts or omissions by the Indemnified Party pursuant to or in accordance with this Agreement, except to the extent that suchLiabilities are finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction to haveresulted from the Indemnified Party’s bad faith, fraud, wilful misconduct, gross negligence, or in the case of a criminal matter,conduct undertaken with knowledge that the conduct was unlawful.10.2.3 The maximum amount of the aggregate liability of the Indemnified Parties pursuant to this Agreement will be equal to theamounts previously paid in respect of Services pursuant to this Agreement in the two most recent calendar years by the ServiceRecipients pursuant to Article 7.10.2.4 For the avoidance of doubt, the provisions of this Section 10.2 will survive the completion of the Services rendered under,or any termination or purported termination of, this Agreement.10.3 Benefit to all Indemnified PartiesThe Service Recipients hereby constitute the Managers as trustees for each of the Indemnified Parties of the covenants ofthe Service Recipients under this Article 10 with respect to such Indemnified Parties and the Managers hereby accept such trust andagree to hold and enforce such covenants on behalf of the Indemnified Parties.ARTICLE 11TERM AND TERMINATION11.1 TermThis Agreement will continue in full force and effect, in perpetuity, until terminated in accordance with Section 11.2 orSection 11.3.11.2 Termination by the Service Recipients11.2.1 The Service Recipients may, subject to Section 11.2.2, terminate this Agreement effective upon written notice oftermination to the Managers without payment of any termination fee if:11.2.1.1 any of the Managers defaults in the performance or observance of any material term, condition or agreementcontained in this Agreement in a manner that results in material harm to the Service Recipients and such default continuesfor a period of 60 days after written notice thereof specifying such default and requesting that the same be remedied in such60-day period; provided, however, that if the fact, circumstance or condition that is the subject of such obligation cannotreasonably be remedied within such 60-day period and if, within such period, the Managers provide reasonable evidence tothe Service Recipients that they have commenced, and thereafter proceed with all due diligence, to remedy the fact,circumstance or condition that is the subject of such obligation, such period will be extended for a reasonable periodsatisfactory to the Service Recipients, acting reasonably, for the Managers to remedy the same;-20 -

11.2.1.2 any of the Managers engages in any act of fraud, misappropriation of funds or embezzlement against any ServiceRecipient that results in material harm to the Service Recipients;11.2.1.3 there is an event of any gross negligence on the part of any of the Managers in the performance of its obligationsunder this Agreement and such gross negligence results in material harm to the Service Recipients; or11.2.1.4 each of the Managers makes a general assignment for the benefit of its creditors, institutes proceedings to beadjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court ofcompetent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to thefiling of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdictionappointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.11.2.2 This Agreement may only be terminated pursuant to Section 11.2.1 by the BPY General Partner on behalf of BPY withthe prior unanimous approval of the members of the Independent Committee.11.2.3 Each of the Service Recipients hereby agrees and confirms that this Agreement may not be terminated due solely to thepoor performance or underperformance of any of the BPY Group’s operations or any investment made by any member of theBPY Group on the recommendation of any member of the Manager Group.11.3 Termination by the Managers11.3.1 The Managers may terminate this Agreement effective upon written notice of termination to the Service Recipientswithout payment of any termination fee if:11.3.1.1 any Service Recipient defaults in the performance or observance of any material term, condition or agreementcontained in this Agreement in a manner that results in material harm to the Managers and such default continues for aperiod of 60 days after written notice thereof specifying such default and-21 -

equesting that the same be remedied in such 60-day period; provided, however, that if the fact, circumstance or conditionthat is the subject of such obligation cannot reasonably be remedied within such 60-day period and if, within such period,the Service Recipients provide reasonable evidence to the Managers that they have commenced, and thereafter proceedwith all due diligence, to remedy the fact, circumstance or condition that is the subject of such obligation, such period willbe extended for a reasonable period satisfactory to the Managers, acting reasonably, for the Service Recipients to remedythe same; or11.3.1.2 any Service Recipient makes a general assignment for the benefit of its creditors, institutes proceedings to beadjudicated voluntarily bankrupt, consents to the filing of a petition of bankruptcy against it, is adjudicated by a court ofcompetent jurisdiction as being bankrupt or insolvent, seeks reorganization under any bankruptcy law or consents to thefiling of a petition seeking such reorganization or has a decree entered against it by a court of competent jurisdictionappointing a receiver liquidator, trustee or assignee in bankruptcy or in insolvency.11.4 Survival Upon TerminationIf this Agreement is terminated pursuant to this Article 11, such termination will be without any further liability orobligation of any party hereto, except as provided in Section 6.4, Section 7.3, Section 7.7, Article 10, Section 11.5 and Section 11.6.11.5 Action Upon Termination11.5.1 From and after the effective date of the termination of this Agreement, the Managers will not be entitled to receive theBase Management Fee for further Services under this Agreement, but will be paid all compensation accruing to and includingthe date of termination.11.5.2 Upon any termination of this Agreement, the Managers will forthwith:11.5.2.1 after deducting any accrued compensation and reimbursements for any Expenses to which it is then entitled, payover to the Service Recipients all money collected and held for the account of the Service Recipients pursuant to thisAgreement;11.5.2.2 deliver to the Service Recipients’ Governing Bodies a full accounting, including a statement showing all paymentscollected by it and a statement of all money held by it, covering the period following the date of the last accountingfurnished to the Governing Bodies with respect to the Service Recipients; and11.5.2.3 deliver to the Service Recipients’ Governing Bodies all property and documents of the Service Recipients then inthe custody of the Manager Group.-22 -

11.6 Release of Money or other Property Upon Written RequestThe Managers hereby agree that any money or other property of the Service Recipients or their Subsidiaries held by theManager Group under this Agreement will be held by the relevant member of the Manager Group as custodian for such Person,and the relevant member of the Manager Group’s records will be appropriately marked clearly to reflect the ownership of suchmoney or other property by such Person. Upon the receipt by the relevant member of the Manager Group of a written requestsigned by a duly authorized representative of a Service Recipient requesting the relevant member of the Manager Group torelease to the Service Recipient any money or other property then held by the relevant member of the Manager Group for theaccount of such Service Recipient under this Agreement, the relevant member of the Manager Group will release such money orother property to the Service Recipient within a reasonable period of time, but in no event later than 60 days following suchrequest. The relevant member of the Manager Group will not be liable to any Service Recipient, a Service Recipient’sGoverning Body or any other Person for any acts performed or omissions to act by a Service Recipient in connection with themoney or other property released to the Service Recipient in accordance with the second sentence of this Section 11.6. EachService Recipient will indemnify and hold harmless the relevant member of the Manager Group, any of its Affiliates (other thanany member of the BPY Group) and any directors, officers, agents, subcontractors, delegates, members, partners, shareholders,employees and other representatives of each of the foregoing from and against any and all Liabilities which arise in connectionwith the relevant member of the Manager Group’s release of such money or other property to the Service Recipient inaccordance with the terms of this Section 11.6. Indemnification pursuant to this provision will be in addition to any right of suchPersons to indemnification under Section 10.1 hereof. For the avoidance of doubt, the provisions of this Section 11.6 willsurvive termination of this Agreement. The Service Recipients hereby constitute the Managers as trustees for each Personentitled to indemnification pursuant to this Section 11.6 of the covenants of the Service Recipients under this Section 11.6 withrespect to such Persons and the Managers hereby accept such trust and agree to hold and enforce such covenants on behalf ofsuch Persons.ARTICLE 12GENERAL PROVISIONS12.1 Limited Liability of Limited PartnersThe parties acknowledge that each of BPY, the Property Partnership and BGRE Partners LP is a limited partnership, alimited partner of which is liable for any liabilities or losses of the relevant partnership only to the extent of the amount that suchlimited partner has contributed, or agreed to contribute, to the capital of the relevant partnership and such limited partner’s pro ratashare of any undistributed income.12.2 Assignment12.2.1 This Agreement will not be assigned by the Managers without the prior written consent of BPY, except (i) pursuant toSection 2.4, or (ii) in the case of assignment by any-23 -

of the Managers to an Affiliate or to a Person that is its successor by merger, amalgamation or acquisition of the business of theManager, in which case the Affiliate or successor will be bound under this Agreement and by the terms of the assignment in thesame manner as such Manager is bound under this Agreement. In addition, provided that the Managers provide prior writtennotice to the Service Recipients for informational purposes only, nothing contained in this Agreement will preclude any pledge,hypothecation or other transfer or assignment of any of the Managers’ rights under this Agreement, including any amountspayable to the Managers under this Agreement, to a bona fide lender as security.12.2.2 This Agreement will not be assigned by any of the Service Recipients without the prior written consent of the Managers,except in the case of assignment by a Service Recipient to a Person that is its successor by merger, amalgamation or acquisitionof the business of the Service Recipient, in which case the successor will be bound under this Agreement and by the terms of theassignment in the same manner as the Service Recipient is bound under this Agreement.12.2.3 Any purported assignment of this Agreement in violation of this section 12.2 will be null and void.12.3 EnurementThis Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors andpermitted assigns.12.4 NoticesAny notice or other communication required or permitted to be given hereunder will be in writing and will be given byprepaid first-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Anysuch notice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance ofpostal service due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after the postmarkeddate thereof, or if sent by facsimile or other means of electronic communication, will be deemed to have been received on theBusiness Day following the sending, or if delivered by hand will be deemed to have been received at the time it is delivered to theapplicable address noted below either to the individual designated below or to an individual at such address having apparent authorityto accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of ageneral discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered byhand or sent by facsimile or other means of electronic communication and will be deemed to have been received in accordance withthis section. Notices and other communications will be addressed as follows:12.4.1 if to BPY:Brookfield Property Partners Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary-24 -

12.4.2 if to the Property Partnership:Brookfield Property General Partner Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary12.4.3 if to Brookfield:Brookfield Asset Management Inc.Suite 300, Brookfield Place181 Bay Street, Box 762,Toronto, OntarioM5J 2T3Attention: Vice President, Legal Affairs12.4.4 if to any of the Managers, at the applicable address listed on Schedule A hereto12.4.5 if to any of the Holding Entities, at the applicable address listed on Schedule B heretoor to such other addresses as a party may from time to time notify the others in accordance with this Section 12.4.12.5 Further AssurancesEach of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, allsuch further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of givingeffect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement totheir full extent the provisions of this Agreement.12.6 CounterpartsThis Agreement may be signed in counterparts and each of such counterparts will constitute an original document and suchcounterparts, taken together, will constitute one and the same instrument.12.7 Other Holding EntitiesThe parties acknowledge that any Holding Entity that is not a party to this Agreement will execute a counterpart of thisAgreement agreeing to be bound by the terms of this Agreement.-25 -

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IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT INC.By:Name:Title:BROOKFIELD PROPERTY PARTNERS L.P.,By: BROOKFIELD PROPERTY PARTNERSLIMITED, its general partnerName:Title:BROOKFIELD PROPERTY L.P.By: BROOKFIELD PROPERTY GP L.P., itsgeneral partnerBy: BROOKFIELD PROPERTY GENERALPARTNER LIMITED, its general partnerName:Title:

Schedule AIN WITNESS WHEREOF the Managers have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT(BARBADOS) INC.By:Name:Title:Address for Notice:Brookfield Asset Management (Barbados) Inc.Cedar Court, 2nd FloorWildey Business ParkSt. Michael, BarbadosAttention: SecretaryBGRE PARTNERS LPBy: BGRE PARTNERS GP INC., its generalpartnerName:Title:Address for Notice:BGRE Partners GP Inc.Suite 300, Brookfield Place181 Bay Street, Box 762Toronto, OntarioM5J 2T3Attention: General Counsel

BROOKFIELD DEVELOPMENTS EUROPELTD.By:Name:Title:Address for Notice:Brookfield Developments Europe Ltd.23 Hanover SquareLondon W1S 1JBAttention: SecretaryBROOKFIELD GLOBAL REAL ESTATE LLCBy:Name:Title:Address for Notice:Brookfield Global Real Estate LLCThree World Financial Center200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General Counsel

Schedule BIN WITNESS WHEREOF the Holding Entities have executed this Agreement as of the day and year first above written.BROOKFIELD BPY HOLDINGS (CANADA)INC.By:Name:Title:Address for Notice:Brookfield BPY Holdings (Canada) Inc.Suite 300, Brookfield Place181 Bay Street, Box 762Toronto, OntarioM5J 2T3Attention: General CounselBPY BERMUDA HOLDINGS I LIMITEDBy:Name:Title:Address for Notice:BPY Bermuda Holdings I Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary

BROOKFIELD BPY PROPERTY HOLDINGS IINC.By:Name:Title:Address for Notice:Brookfield BPY Property Holdings I Inc.Three World Financial Center200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General CounselBROOKFIELD BPY RETAIL HOLDINGS IINC.By:Name:Title:Address for Notice:Brookfield BPY Retail Holdings I Inc.Three World Financial Center200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General Counsel

Schedule CJOINDER TO MASTER SERVICES AGREEMENTTHIS JOINDER to the Master Services Agreement dated as of , 2012 among Brookfield Asset Management Inc.(“Brookfield”), Brookfield Property Partners L.P., Brookfield Property L.P., the Managers and the Holding Entities (the “MasterServices Agreement”) is made and entered into as of this day of , by , a[corporation/partnership/limited partnership] governed by the laws of(the “New Manager”). Capitalized terms usedherein but not otherwise defined shall have the meanings set forth in the Master Services Agreement.RECITALS:A. The Master Services Agreement provides that the Managers may, from time to time, appoint an Affiliate of Brookfield to actas a new Manager under that agreement;B. The New Manager is an Affiliate of Brookfield; andC. The Managers wish to appoint the New Manager to act as a new Manager under the Master Services Agreement and the NewManager wishes to accept such appointment.NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Joinder and other goodand valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:1. Agreement to be Bound. The New Manager hereby agrees that upon execution of this Joinder, it shall become a party to theMaster Services Agreement and acknowledges that it is fully bound by, and subject to, all of the covenants, representations, terms andconditions of the Managers under the Master Services Agreement.2. Successors and Assigns. Any purported assignment of this Joinder in violation of section 12.2 of the Master Services Agreementwill be null and void.3. Enurement. This Joinder will enure to the benefit of and be binding upon the parties hereto and their respective successors andpermitted assigns.4. Notices. Notices and other communications to the New Manager will be addressed as follows:5. Counterparts. This Joinder may be signed in counterparts and each of such counterparts will constitute an original document andsuch counterparts, taken together, will constitute one and the same instrument.

6. Governing Law. This Joinder will be governed by and interpreted and enforced in accordance with the laws of the Province ofOntario and the federal laws of Canada applicable therein.[NEXT PAGE IS SIGNATURE PAGE]

IN WITNESS WHEREOF the parties have executed this Joinder as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT(BARBADOS) INC.By:Name:Title:BGRE PARTNERS LPBy: BGRE PARTNERS GP INC., its generalpartnerName:Title:BROOKFIELD DEVELOPMENTS EUROPELTD.By:Name:Title:BROOKFIELD GLOBAL REAL ESTATE LLCBy:Name:Title:By:Name:Title:

Exhibit 4.4BROOKFIELD ASSET MANAGEMENT INC.- and -BROOKFIELD PROPERTY PARTNERS L.P.- and -BROOKFIELD PROPERTY L.P.- and -each of the Managers that has executed this Agreement on Schedule A hereto- and -each of the Holding Entities that has executed this Agreement on Schedule B heretoFORM OF RELATIONSHIP AGREEMENT, 2012

TABLE OF CONTENTSARTICLE 1INTERPRETATION 41.1 Definitions 41.2 Headings and Table of Contents 61.3 Interpretation 61.4 Invalidity of Provisions 71.5 Entire Agreement 71.6 Waiver, Amendment 81.7 Governing Law 8ARTICLE 2ACQUISITIONS OF COMMERCIAL PROPERTY 82.1 Primary Entity 82.2 Brookfield Group Operations 82.3 Operating Entity Arrangements 82.4 Co-investments with Brookfield; Joint Ventures; Consortium Arrangements 82.5 No Exclusivity 92.6 Limitations on Acquisition Opportunities 102.7 Reporting 11ARTICLE 3REPRESENTATIONS AND WARRANTIES 113.1 Representations and Warranties of Brookfield and the Managers 113.2 Representations and Warranties of the Holding Entities 123.3 Representations and Warranties of BPY 123.4 Representations and Warranties of the Property Partnership 13ARTICLE 4TERMINATION 144.1 Term 144.2 Termination 14ARTICLE 5LIMITATION OF LIABILITY 145.1 No Liability 145.2 Maximum Liability 145.3 Survival 14ARTICLE 6GENERAL PROVISIONS 156.1 Limited Liability of Limited Partners 156.2 Assignment 156.3 Enurement 156.4 Notices 156.5 Further Assurances 166.6 Counterparts 166.7 Other Holding Entities 17

BETWEEN:RECITALS:RELATIONSHIP AGREEMENTTHIS AGREEMENT made as of the day of , 2012.BROOKFIELD ASSET MANAGEMENT INC.(“Brookfield”), a corporation existing under the laws of theProvince of Ontario- and -BROOKFIELD PROPERTY PARTNERS L.P. (“BPY”), anexempted limited partnership existing under the laws of Bermuda- and -BROOKFIELD PROPERTY L.P. (the “PropertyPartnership”), an exempted limited partnership existing underthe laws of Bermuda- and -each of the Managers (as defined below)- and -each of the Holding Entities (as defined below)WHEREAS members of the BPY Group (as defined below) directly or indirectly hold interests in Commercial Property (asdefined below) and will directly or indirectly acquire, from time to time, interests in other Commercial Property;WHEREAS members of the BPY Group and members of the Brookfield Group (as defined below) have entered into a numberof agreements and arrangements in order to enable the BPY Group to be established and to directly or indirectly hold interests in, oroperate Commercial Property;WHEREAS Brookfield has entered into agreements and established protocols with certain of the Operating Entities (as definedbelow) to govern certain aspects of the relationship between them and members of the Brookfield Group (the “Operating EntityArrangements”); andWHEREAS BPY, the Property Partnership, the Holding Entities, the Managers and Brookfield wish to enter into thisAgreement to govern certain aspects of the relationship between them and other members of the BPY Group and the BrookfieldGroup.

NOW THEREFORE in consideration of the mutual covenants and agreements contained in this Agreement and other good andvaluable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties hereto agree as follows:ARTICLE 1INTERPRETATION1.1 DefinitionsIn this Agreement, except where the context otherwise requires, the following terms will have the following meanings:1.1.1 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or moreintermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person;1.1.2 “Agreement” means this Relationship Agreement;1.1.3 “BPY” has the meaning assigned thereto in the preamble;1.1.4 “BPY General Partner” means Brookfield Property Partners Limited, which is the general partner of BPY;1.1.5 “BPY Group” means BPY, the Property Partnership, the Holding Entities, the Operating Entities and any other direct orindirect Subsidiary of a Holding Entity;1.1.6 “Brookfield” has the meaning assigned thereto in the preamble;1.1.7 “Brookfield Fund” means any private investment entity, managed account, joint venture, consortium, partnership orinvestment fund established, sponsored or managed by a member of the Brookfield Group;1.1.8 “Brookfield Group” means Brookfield, any of its Affiliates and any Brookfield Funds, but excludes any member of theBPY Group;1.1.9 “Business Day” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda,the Province of Ontario, or the State of New York;1.1.10 “Commercial Property” means commercial and other real property which generates or has the potential to generateincome, including office, retail, multi-family and industrial assets, but excluding, among other things, residential landdevelopment, home building, construction, real estate advisory services and other similar operations or services;1.1.11 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controlsanother Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example,the status of A being the general partner of B) or by virtue of the beneficial ownership of or control-4 -

over a majority of the voting interests in B; and, for greater certainty and without limitation, if A owns or has control over sharesor other securities to which are attached more than 50% of the votes permitted to be cast in the election of directors to theGoverning Body of B, or A is the general partner of B, a limited partnership, then in each case A Controls B for this purpose;and the term “Controlled” has the corresponding meaning;1.1.12 “Governing Body” means (i) with respect to a corporation or limited company, the board of directors of such corporationor limited company, (ii) with respect to a limited liability company, the manager(s) or managing partner(s) of such limitedliability company, (iii) with respect to a partnership, the board, committee or other body of each general partner or managingpartner of such partnership, that serves a similar function (or if any such general partner or managing partner is itself apartnership, the board, committee or other body of such general or managing partner’s general or managing partner that serves asimilar function), and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in thecase of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such bodyhas delegated any power or authority, including any officer or managing director;1.1.13 “Holding Entities” means the entities that have executed this Agreement on Schedule B hereto and any direct whollyownedSubsidiary of the Property Partnership created or acquired after the date of this Agreement, excluding, for greatercertainty, any Operating Entities;1.1.14 “Liabilities” means any claims, liabilities, losses, damages, costs or expenses (including legal fees) incurred orthreatened in connection with any and all actions, suits, investigations, proceedings or claims of any kind whatsoever, whetherarising under statute or action of a regulatory authority or otherwise or in connection with the business, investments andactivities in respect of or arising from this Agreement;1.1.15 “Managers” means the entities that have executed this Agreement on Schedule A hereto and any other Affiliate ofBrookfield that is appointed from time to time to act as a manager pursuant to the Master Services Agreement;1.1.16 “Master Services Agreement” means the master services agreement among the Managers, BPY, the PropertyPartnership, the Holding Entities and others;1.1.17 “Operating Entities” means, from time to time, the Persons in which the Service Recipients hold interests and that(i) directly hold real property assets, or (ii) indirectly hold real property assets but all of the interests of which are not held by theService Recipients, other than, in the case of each of (i) and (ii), any Person in which the Service Recipients hold interests forinvestment purposes only of less than 5% of the outstanding equity securities of that Person;1.1.18 “Operating Entity Arrangements” has the meaning assigned thereto in the preamble;-5 -

1.1.19 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture,syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimitedliability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personalrepresentative, regulatory body or agency, government or governmental agency, authority or other entity however designated orconstituted and pronouns have a similarly extended meaning;1.1.20 “Property General Partner” means Brookfield Property General Partner Limited, which is the general partner ofProperty GP LP;1.1.21 “Property GP LP” means Brookfield Property GP L.P., which is the general partner of the Property Partnership;1.1.22 “Property Partnership” has the meaning assigned thereto in the preamble;1.1.23 “Service Recipients” means BPY, the Property Partnership, the Holding Entities and, at the option of the HoldingEntities, any wholly-owned Subsidiary of a Holding Entity, excluding, for greater certainty, any Operating Entities;1.1.24 “Subsidiary” means, with respect to any Person, (i) any other Person that is directly or indirectly Controlled by suchPerson, (ii) any trust in which such Person holds all of the beneficial interests or (iii) any partnership, limited liability companyor similar entity in which such Person holds all of the interests other than the interests of any general partner, managing memberor similar Person; and1.1.25 “Term” has the meaning assigned thereto in Section 4.1.1.2 Headings and Table of ContentsThe inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will notaffect the construction or interpretation hereof.1.3 InterpretationIn this Agreement, unless the context otherwise requires:1.3.1 words importing the singular shall include the plural and vice versa, words importing gender shall include all genders orthe neuter, and words importing the neuter shall include all genders;1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, arenot to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items ormatters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of thegeneral term or statement;1.3.3 references to any Person include such Person’s successors and permitted assigns;-6 -

1.3.4 except as otherwise provided in this Agreement, any reference in this Agreement to a statute, regulation, policy, rule orinstrument shall include, and shall be deemed to be a reference also to, all rules and regulations made under such statute, in thecase of a statute, to all amendments made to such statute, regulation, policy, rule or instrument, and to any statute, regulation,policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation,policy, rule or instrument so referred to;1.3.5 any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to thisAgreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from timeto time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified; and1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not aBusiness Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite timeon the next succeeding day that is a Business Day.1.4 Invalidity of ProvisionsEach of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity orunenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceabilityof any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders anyprovision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace anyprovision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes asclose as possible to that of the invalid or unenforceable provision which it replaces.1.5 Entire AgreementThis Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement.There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements inconnection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on anywarranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into thisAgreement, or any amendment or supplement hereto, by any party to this Agreement or its directors, officers, employees or agents, toany other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced towriting and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into thisAgreement or any amendment or supplement hereto by reason of any such warranty, representation, opinion, advice or assertion offact. Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation,opinion, advice or assertion of fact, except to the extent contemplated above.-7 -

1.6 Waiver, AmendmentExcept as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unlessexecuted in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of anyother provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expresslyprovided. A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single orpartial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right.1.7 Governing LawThis Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontarioand the federal laws of Canada applicable therein. Each party irrevocably attorns and submits to the non-exclusive jurisdiction of theOntario courts situated in the City of Toronto and waives objection to the venue of any proceeding in such court or any argument thatsuch court provides an inconvenient forum.ARTICLE 2ACQUISITIONS OF COMMERCIAL PROPERTY2.1 Primary EntitySubject to the other terms in this Article 2, each of Brookfield and the Managers acknowledges and agrees that, during theTerm, the BPY Group will serve as the primary entity through which acquisitions of Commercial Property will be made byBrookfield and its Affiliates on a global basis.2.2 Brookfield Group OperationsEach of the parties acknowledges and agrees that the members of the Brookfield Group carry on a diverse range ofbusinesses worldwide, including the development, ownership and/or management of Commercial Property, and investing (andadvising on investing) in Commercial Property, or loans, debt instruments and other securities with underlying collateral or exposureto Commercial Property. Except as explicitly provided herein, nothing in this Agreement shall in any way limit or restrict members ofthe Brookfield Group from carrying on their respective businesses.2.3 Operating Entity ArrangementsEach of the parties acknowledges and agrees that the Operating Entity Arrangements remain in full force and effect.2.4 Co-investments with Brookfield; Joint Ventures; Consortium Arrangements2.4.1 It is an integral part of the Brookfield Group’s (and the BPY Group’s) strategy to pursue acquisitions through consortiumarrangements with institutional investors, strategic-8 -

partners or financial sponsors and to form partnerships to pursue acquisitions on a specialized or global basis, and,notwithstanding Section 2.1 (but subject to Section 2.4.3), there is no minimum level of participation in such arrangements towhich the BPY Group is entitled.2.4.2 Members of the Brookfield Group have established and manage a number of Brookfield Funds whose investmentobjectives include the acquisition of Commercial Property and members of the Brookfield Group may in the future establishsimilar funds. Nothing herein shall limit or restrict members of the Brookfield Group from establishing or advising BrookfieldFunds or similar entities, or limit or restrict any such entity from carrying out any investment.2.4.3 For any investment carried out by the Brookfield Group as contemplated by section 2.4.1 or by a Brookfield Fund, ineither case, that involves the acquisition of Commercial Property that is suitable for the BPY Group, the appropriate member ofthe BPY Group will be offered the opportunity to take up the Brookfield Group’s share of such acquisition. Each of the partiesacknowledges and agrees that this commitment by the Brookfield Group, and the BPY Group’s ability to take advantage of theopportunities set out in the foregoing sentence, will be subject to a number of limitations including those set out in Sections 2.5and 2.6.2.5 No ExclusivityEach of BPY, the Property Partnership and the Holding Entities acknowledges and agrees that:2.5.1 the BPY Group will not serve as the exclusive entity through which acquisitions of Commercial Property will be made byBrookfield and its Affiliates on a global basis, no member of the Brookfield Group has any obligation to source acquisitionopportunities for any member of the BPY Group, nor has any member of the Brookfield Group agreed to commit to any memberof the BPY Group any minimum level of dedicated resources for the pursuit of acquisitions of Commercial Property other thanas contemplated by the Master Services Agreement;2.5.2 subject to providing the BPY Group with the opportunity to participate on the basis described in Section 2.4.3 above, (i) allmembers of the Brookfield Group may pursue other business activities and provide services to third parties that compete directlyor indirectly with the BPY Group, (ii) members of the Brookfield Group have established or advised, and may continue toestablish or advise, other entities that rely on the diligence, skill and business contacts of the Brookfield Group’s professionalsand the information and acquisition opportunities they generate during the normal course of their activities, (iii) some of theseother entities may have objectives that overlap with the BPY Group’s objectives or may acquire Commercial Property that couldbe considered appropriate acquisitions for the BPY Group, (iv) members of the Brookfield Group may have financial incentivesto assist those other entities over the BPY Group, and (v) if any of the Managers determines that an opportunity is not suitablefor the BPY Group, any member of the Brookfield Group may still pursue such opportunity on its own behalf;-9 -

2.5.3 nothing herein shall limit or restrict the ability of the Brookfield Group to make any investment recommendation or takeany other action in connection with its public securities businesses;2.5.4 nothing herein shall limit or restrict any member of the Brookfield Group from investing in any loans or debt securities orfrom taking any action in connection with any loan or debt security notwithstanding that the underlying collateral is comprisedof or includes Commercial Property provided that the original purpose of the investment was not to acquire a controlling interestin such Commercial Property; and2.5.5 nothing herein shall in any way restrict the Brookfield Group from acquiring or holding an investment of less than 5% ofthe outstanding shares of any publicly traded company or from carrying out any other investment in a company or real estateportfolio where the underlying assets do not principally constitute Commercial Property.2.6 Limitations on Acquisition OpportunitiesEach of the parties acknowledges and agrees that (i) the BPY Group’s ability to grow will depend in part on the BrookfieldGroup’s ability to identify and present the BPY Group with acquisition opportunities, and (ii) there are a number of factors whichcould materially and adversely impact the extent to which acquisition opportunities are made available to the BPY Group by theBrookfield Group, including:2.6.1 the Brookfield Group will only recommend acquisition opportunities that it believes, in its sole discretion, are suitable forthe BPY Group;2.6.2 the same professionals within the Brookfield Group’s organization who are involved in acquisitions of CommercialProperty have other responsibilities within the Brookfield Group’s broader asset management business, and the limits on theavailability of such individuals will likewise result in a limitation on the availability of acquisition opportunities for the BPYGroup;2.6.3 members of the Brookfield Group may consider certain assets or operations that have both infrastructure relatedcharacteristics and commercial property related characteristics to be infrastructure and not commercial property;2.6.4 members of the Brookfield Group may not consider an acquisition of Commercial Property that comprises part of abroader enterprise to be suitable for the BPY Group, unless the primary purpose of such acquisition, as determined byBrookfield acting in good faith, is to acquire the underlying Commercial Property;2.6.5 legal, regulatory, tax and other commercial considerations will be an important factor in determining whether anopportunity is suitable for the BPY Group; and2.6.6 in addition to structural limitations, the determination of whether a particular acquisition is suitable for the BPY Group ishighly subjective and is dependent on a number of factors including the BPY Group’s liquidity position at the time, the riskprofile of the opportunity, its fit with the balance of the BPY Group’s then current operations and other factors.-10 -

2.7 ReportingSubject to confidentiality obligations to third parties, Brookfield shall cause the Managers to provide a report to the BPYGroup on a quarterly basis of all Commercial Property acquired by the Brookfield Group during the quarter that was not offered to theBPY Group, including an explanation of why such acquisition opportunities were not considered suitable for the BPY Group.ARTICLE 3REPRESENTATIONS AND WARRANTIES3.1 Representations and Warranties of Brookfield and the Managers3.1.1 Each of the Managers (or, as applicable, its general partner on its behalf) and Brookfield hereby represents and warrants toeach of BPY, the Property Partnership and the Holding Entities that:3.1.1.1 it (and, as applicable, its general partner) is validly organized and existing under the relevant laws governing itsformation and existence;3.1.1.2 it (or, as applicable, its general partner on its behalf) has the power, capacity and authority to enter into thisAgreement and to perform its duties and obligations hereunder;3.1.1.3 it (or, as applicable, its general partner on its behalf) has taken all necessary action to authorize the execution,delivery and performance of this Agreement;3.1.1.4 the execution and delivery of this Agreement by it (or, as applicable, its general partner on its behalf) and theperformance by it of its obligations hereunder do not and will not contravene, breach or result in any default under itsarticles, by-laws, constituent documents or other organizational documents (and, if applicable, its general partner’s articles,by-laws, constituent documents or other organizational documents);3.1.1.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with theexecution, delivery or performance by it (or, as applicable, its general partner on its behalf) of this Agreement; and3.1.1.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with itsterms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other lawsof general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles ofequity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as tothe availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.-11 -

3.2 Representations and Warranties of the Holding Entities3.2.1 Each of the Holding Entities hereby represents and warrants to each of the Managers and Brookfield that:3.2.1.1 it is validly organized and existing under the relevant laws governing its formation and existence;3.2.1.2 it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligationshereunder;3.2.1.3 it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;3.2.1.4 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not andwill not contravene, breach or result in any default under its articles, by-laws, constituent documents or otherorganizational documents;3.2.1.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with theexecution, delivery or performance by it of this Agreement; and3.2.1.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with itsterms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other lawsof general application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles ofequity, including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as tothe availability of equitable remedies, whether such principles are considered in a proceeding at law or in equity.3.3 Representations and Warranties of BPYThe BPY General Partner, in its capacity as the general partner of BPY, hereby represents and warrants to Brookfield that:3.3.1 each of BPY and the BPY General Partner is validly organized and existing under the relevant laws governing itsformation and existence;3.3.2 the BPY General Partner has the power, capacity and authority to enter into this Agreement and to perform its duties andobligations hereunder on behalf of BPY;3.3.3 the BPY General Partner has taken all necessary action to authorize the execution, delivery and performance of thisAgreement on behalf of BPY;- 12 -

3.3.4 the execution and delivery of this Agreement by the BPY General Partner on behalf of BPY and the performance by BPYof its obligations hereunder do not and will not contravene, breach or result in any default under the organizational documents ofthe BPY General Partner or BPY, as applicable;3.3.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by the BPY General Partner on behalf of BPY of this Agreement; and3.3.6 this Agreement constitutes a valid and legally binding obligation of BPY enforceable against it in accordance with itsterms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws ofgeneral application limiting the enforcement of creditors’ rights and remedies generally; and (ii) general principles of equity,including standards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availabilityof equitable remedies, whether such principles are considered in a proceeding at law or in equity.3.4 Representations and Warranties of the Property PartnershipThe Property General Partner, in its capacity as the general partner of Property GP LP, the general partner of the PropertyPartnership hereby represents and warrants to Brookfield that:3.4.1 each of the Property General Partner and the Property Partnership is validly organized and existing under the relevant lawsgoverning its formation and existence;3.4.2 the Property General Partner has the power, capacity and authority to enter into this Agreement and to perform its dutiesand obligations hereunder on behalf of the Property Partnership;3.4.3 the Property General Partner has taken all necessary action to authorize the execution, delivery and performance of thisAgreement on behalf of the Property Partnership;3.4.4 the execution and delivery of this Agreement by the Property General Partner on behalf of the Property Partnership and theperformance by the Property Partnership of its obligations hereunder do not and will not contravene, breach or result in anydefault under the organizational documents of the Property General Partner, Property GP LP or the Property Partnership, asapplicable;3.4.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by the Property General Partner on behalf of the Property Partnership of this Agreement; and3.4.6 this Agreement constitutes a valid and legally binding obligation of the Property Partnership enforceable against it inaccordance with its terms, subject to: (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganizationand other laws of general application limiting the enforcement of creditors’ rights and remedies generally;- 13 -

and (ii) general principles of equity, including standards of materiality, good faith, fair dealing and reasonableness, equitabledefenses and limits as to the availability of equitable remedies, whether such principles are considered in a proceeding at law orin equity.ARTICLE 4TERMINATION4.1 TermThe term of this Agreement (“Term”) will begin on the date hereof and will continue in full force and effect untilterminated in accordance with Section 4.2.4.2 TerminationThe rights and obligations of the parties to this Agreement will automatically terminate and no longer be of any effect uponthe termination of the Master Services Agreement in accordance with its terms.ARTICLE 5LIMITATION OF LIABILITY5.1 No LiabilityEach of BPY, the Property Partnership and the Holding Entities hereby agrees that no member of the Brookfield Group,nor any Affiliate, director, officer, employee, contractor, agent, advisor, member, partner, shareholder or other representative of anymember of the Brookfield Group, will be liable to any member of the BPY Group or any Governing Body, member of any GoverningBody, officer, security holder or partner of any member of the BPY Group for any Liabilities that may occur as a result of any acts oromissions by any member of the Brookfield Group pursuant to or in accordance with this Agreement, except to the extent that suchLiabilities are finally determined by a final and non-appealable judgment entered by a court of competent jurisdiction to have resultedfrom a Brookfield Group member’s bad faith, fraud, wilful misconduct, gross negligence, or in the case of a criminal matter, conductundertaken with knowledge that the conduct was unlawful.5.2 Maximum LiabilityThe parties acknowledge and agree that the maximum amount of the aggregate Liability of any member of the BrookfieldGroup and any Affiliate, director, officer, employee, contractor, agent, advisor, member, partner, shareholder or other representativeof any member of the Brookfield Group pursuant to this Agreement will be equal to the amounts previously paid in the two mostrecent calendar years by the Service Recipients pursuant to the Master Services Agreement.5.3 SurvivalThe provisions of this Article 5 will survive the termination of this Agreement.-14 -

ARTICLE 6GENERAL PROVISIONS6.1 Limited Liability of Limited PartnersThe parties acknowledge that each of BPY, the Property Partnership and BGRE Partners LP is a limited partnership, alimited partner of which is liable for any liabilities or losses of the relevant partnership only to the extent of the amount that suchlimited partner has contributed, or agreed to contribute, to the capital of the relevant partnership and such limited partner’s pro ratashare of any undistributed income.6.2 Assignment6.2.1 None of the rights or obligations hereunder shall be assignable or transferable by any party without the prior writtenconsent of the other parties.6.2.2 Any purported assignment of this Agreement in violation of this Article 6 shall be null and void.6.3 EnurementThis Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors andpermitted assigns.6.4 NoticesAny notice or other communication required or permitted to be given hereunder will be in writing and will be given byprepaid first-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Anysuch notice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance ofpostal service due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after the postmarkeddate thereof, or if sent by facsimile or other means of electronic communication, will be deemed to have been received on theBusiness Day following the sending, or if delivered by hand will be deemed to have been received at the time it is delivered to theapplicable address noted below either to the individual designated below or to an individual at such address having apparent authorityto accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of ageneral discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered byhand or sent by facsimile or other means of electronic communication and will be deemed to have been received in accordance withthis section. Notices and other communications will be addressed as follows:6.4.1 if to BPY:Brookfield Property Partners Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary-15 -

6.4.2 if to the Property Partnership:Brookfield Property General Partner Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary6.4.3 if to Brookfield:Brookfield Asset Management Inc.Suite 300, Brookfield Place181 Bay Street, Box 762Toronto, OntarioM5J 2T3Attention: Vice President, Legal Affairs6.4.4 if to any of the Managers, at the applicable address listed on Schedule A hereto6.4.5 if to any of the Holding Entities, at the applicable address listed on Schedule B heretoor to such other addresses as a party may from time to time notify the others in accordance with this Section 6.4.6.5 Further AssurancesEach of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, allsuch further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of givingeffect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement totheir full extent the provisions of this Agreement.6.6 CounterpartsThis Agreement may be signed in counterparts and each of such counterparts will constitute an original document and suchcounterparts, taken together, will constitute one and the same instrument.-16 -

6.7 Other Holding EntitiesThe parties acknowledge that any Holding Entity that is not a party to this Agreement will execute a counterpart of thisAgreement agreeing to be bound by the terms of this Agreement.[NEXT PAGE IS SIGNATURE PAGE]-17 -

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT INC.By:Name:Title:BROOKFIELD PROPERTY PARTNERS L.P.,By: BROOKFIELD PROPERTY PARTNERSLIMITED, its general partnerName:Title:BROOKFIELD PROPERTY L.P.By: BROOKFIELD PROPERTY GP L.P., itsgeneral partnerBy: BROOKFIELD PROPERTY GENERALPARTNER LIMITED, its general partnerName:Title:

Schedule AIN WITNESS WHEREOF the Managers have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT(BARBADOS) INC.By:Name:Title:Address for Notice:Brookfield Asset Management (Barbados) Inc.Cedar Court, 2nd FloorWildey Business ParkSt. Michael, BarbadosAttention: SecretaryBGRE PARTNERS LPBy: BGRE PARTNERS GP INC., its generalpartnerName:Title:Address for Notice:BGRE Partners GP Inc.Suite 300, Brookfield Place181 Bay Street, Box 762Toronto, OntarioM5J 2T3Attention: General Counsel

BROOKFIELD DEVELOPMENTS EUROPELTD.By:Name:Title:Address for Notice:Brookfield Developments Europe Ltd.23 Hanover SquareLondon W1S 1JBAttention: SecretaryBROOKFIELD GLOBAL REAL ESTATE LLCBy:Name:Title:Address for Notice:Brookfield Global Real Estate LLCThree World Financial Center200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General Counsel

Schedule BIN WITNESS WHEREOF the Holding Entities have executed this Agreement as of the day and year first above written.BROOKFIELD BPY HOLDINGS (CANADA)INC.By:Name:Title:Address for Notice:Brookfield BPY Holdings (Canada) Inc.Suite 300, Brookfield Place181 Bay Street, Box 762Toronto, OntarioM5J 2T3Attention: General CounselBPY BERMUDA HOLDINGS I LIMITEDBy:Name:Title:Address for Notice:BPY Bermuda Holdings I Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary

BROOKFIELD BPY PROPERTY HOLDINGS IINC.By:Name:Title:Address for Notice:Brookfield BPY Property Holdings I Inc.Three World Financial Centre200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General CounselBROOKFIELD BPY RETAIL HOLDINGS IINC.By:Name:Title:Address for Notice:Brookfield BPY Retail Holdings I Inc.Three World Financial Centre200 Vesey Street, 11th FloorNew York, New York10281-1021Attention: General Counsel

Exhibit 4.5BROOKFIELD ASSET MANAGEMENT INC.- and -BROOKFIELD PROPERTY PARTNERS L.P.FORM OF REGISTRATION RIGHTS AGREEMENT, 2012

TABLE OF CONTENTSArticle 1 INTERPRETATION 11.1 Definitions 11.2 Headings and Table of Contents 51.3 Interpretation 51.4 Invalidity of Provisions 61.5 Entire Agreement 61.6 Waiver, Amendment 61.7 Governing Law 7Article 2 REGISTRATION RIGHTS 72.1 Demand Registration 72.2 Piggyback Registrations 102.3 Short-Form Filings 112.4 Holdback Agreements 122.5 Registration Procedures 132.6 Suspension of Dispositions 172.7 Registration Expenses 182.8 Indemnification 182.9 Transfer of Registration Rights 212.10 Current Public Information 222.11 Preservation of Rights 22Article 3 TERMINATION 223.1 Termination 22Article 4 MISCELLANEOUS 234.1 Enurement 234.2 Notices 234.3 Authority 244.4 Further Assurances 244.5 Counterparts 24

THIS AGREEMENT made as of the day of , 2012BETWEEN:RECITALS:REGISTRATION RIGHTS AGREEMENTBROOKFIELD ASSET MANAGEMENT INC. (“Brookfield”)- and -BROOKFIELD PROPERTY PARTNERS L.P. (“BPY”)WHEREAS, BPY desires to provide the Holders (as defined herein) with the registration rights specified in this Agreement withrespect to Registrable Units (as defined herein) on the terms and subject to the conditions set forth herein.NOW THEREFORE in consideration of the premises, mutual covenants and agreements contained in this Agreement and othergood and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties covenant and agree, eachwith the other, as follows:ARTICLE 1INTERPRETATION1.1 DefinitionsThe following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms usedin this Agreement.1.1.1 “Adverse Effect” has the meaning assigned to such term in Section 2.1.5;1.1.2 “Advice” has the meaning assigned to such term in Section 2.6;1.1.3 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or moreintermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person;1.1.4 “Agreement” means this Registration Rights Agreement;1.1.5 “BPY” has the meaning assigned to such term in the preamble;1.1.6 “Brookfield” has the meaning assigned to such term in the preamble;

1.1.7 “Business Day” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda,the Province of Ontario, or the State of New York;1.1.8 “Canadian Commissions” means the securities commissions or other securities regulatory authorities in each of theprovinces and territories of Canada and any successor regulatory authorities having similar powers and, to the extent applicable,in any such province or territory, a federal securities commission or similar regulatory authority;1.1.9 “Canadian Securities Laws” means, collectively, the applicable securities legislation, regulations, rules, policies, blanketrulings, decisions and orders of each of the provinces and territories of Canada and the Canadian Commissions;1.1.10 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controlsanother Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example,the status of A being the general partner of B) or by virtue of the beneficial ownership of or control over a majority of the votinginterests in B; and, for greater certainty and without limitation, if A owns or has control over shares or other securities to whichare attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B, or A is thegeneral partner of B, a limited partnership, then in each case A Controls B for this purpose; and the term “Controlled” has thecorresponding meaning;1.1.11 “Demand Registration” has the meaning assigned to such term in Section 2.1.1(a);1.1.12 “Demanding Unitholders” has the meaning assigned to such term in Section 2.1.1(a);1.1.13 “Demand Request” has the meaning assigned to such term in Section 2.1.1(a);1.1.14 “Effective” means, in the case of a Registration Statement, a declaration by the SEC that such registration statement iseffective, and in the case of a Prospectus, the issuance by the applicable Canadian Commission of a receipt for the finalprospectus;1.1.15 “Effective Date” means the date a Registration Statement or Prospectus becomes Effective;1.1.16 “Excluded Registration” means a registration of (i) securities pursuant to one or more Demand Registrations pursuant toSection 2.1 hereof, (ii) securities registered under the U.S. Securities Act on Form S-8, and (iii) securities registered to effect theacquisition of, or combination with, another Person;2

1.1.17 “FINRA” means Financial Industry Regulatory Authority, Inc.;1.1.18 “Holder” means (i) Brookfield, (ii) any subsidiary of Brookfield holding Registrable Units, and (iii) any direct or indirecttransferee of Brookfield or any of its subsidiaries who shall become a party to this Agreement in accordance with Section 2.9and has agreed in writing to be bound by the terms of this Agreement;1.1.19 “Governing Body” means (i) with respect to a corporation or limited company, the board of directors of such corporationor limited company, (ii) with respect to a limited liability company, the manager(s) or managing partner(s) of such limitedliability company, (iii) with respect to a partnership, the board, committee or other body of each general partner or managingpartner of such partnership that serves a similar function (or if any such general partner or managing partner is itself apartnership, the board, committee or other body of such general or managing partner’s general or managing partner that serves asimilar function), and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in thecase of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such bodyhas delegated any power or authority, including any officer or managing director;1.1.20 “Inspectors” has the meaning assigned to such term in Section 2.5(m);1.1.21 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture,syndicate, sole proprietorship, company or corporation (with or without share capital), limited liability company, unlimitedliability company, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personalrepresentative, regulatory body or agency, government or governmental agency, authority or entity however designated orconstituted and pronouns have a similarly extended meaning;1.1.22 “Piggyback Registration” has the meaning assigned to such term in Section 2.2.1;1.1.23 “POP Issuer” means an issuer eligible to use the POP System or equivalent system established from time to time by theCanadian Commissions;1.1.24 “POP System” means the prompt offering prospectus qualification system under National Instrument 44-101 of theCanadian Securities Administrators entitled “Short Form Prospectus Distributions”;1.1.25 “Prospectus” means a prospectus (including a Shelf Prospectus), including any amendment or supplement thereto,prepared in accordance with applicable Canadian Securities Laws for the purpose of qualifying securities for distribution to thepublic in any province or territory of Canada;1.1.26 “Records” has the meaning assigned to such term in Section 2.5(m);3

1.1.27 “register,” “registered” and “registration” refers to (i) a registration effected by preparing and filing a registrationstatement in compliance with the U.S. Securities Act, and the declaration or ordering of the effectiveness of such registrationstatement, and (ii) a qualification for distribution under Canadian Securities Laws effected by preparing and filing a Prospectus;1.1.28 “Registration Statement” means a registration statement on Form F-1 or F-3 under the U.S. Securities Act (whichincludes any preliminary prospectus, prospectus, prospectus supplement or free writing prospectus used in connectiontherewith);1.1.29 “Registrable Units” means the Units owned by Holders, including Units, issuable to Holders on the conversion ofsecurities convertible, exchangeable or exercisable into Units owned by a Holder, together with any securities owned by Holdersissued with respect to such Units by way of dividend or split or in connection with a combination of units, recapitalization,merger, consolidation, amalgamation, arrangement or other reorganization; provided, however, that Units that, pursuant toSection 3.1, no longer have registration rights hereunder shall not be considered Registrable Units;1.1.30 “Requesting Holders” shall mean any Holder(s) requesting to have its (their) Registrable Units included in any DemandRegistration or Shelf Registration;1.1.31 “Required Filing Date” has the meaning assigned to such term in Section 2.1.1(b);1.1.32 “SEC” means the Securities and Exchange Commission or any other federal agency at the time administering the U.S.Securities Act;1.1.33 “Securities Laws” means Canadian Securities Laws or U.S. Securities Laws, applicable;1.1.34 “Seller Affiliates” has the meaning assigned to such term in Section 2.8.1;1.1.35 “Shelf Prospectus” means a shelf prospectus of BPY filed with the Canadian Commissions under Canadian SecuritiesLaws for offers and secondary sales of Registrable Units on a continuous basis;1.1.36 “Shelf Registration” means a registration of the Registrable Units under a registration statement pursuant to Rule 415under the U.S. Securities Act;1.1.37 “Suspension Notice” has the meaning assigned to such term in Section 2.6;1.1.38 “Units” means limited partnership units of BPY;4

1.1.39 “U.S. Exchange Act” means the United States Securities Exchange Act of 1934, as amended, or any similar federalstatute, and the rules and regulations promulgated by the SEC thereunder;1.1.40 “U.S. Securities Act” means the United States Securities Act of 1933, as amended, or any similar federal statute and therules and regulations promulgated by the SEC thereunder; and1.1.41 “U.S. Securities Laws” means, collectively, the securities laws of the United States, including the U.S. Exchange Act,the U.S. Securities Act, state securities or “blue sky” laws within the United States, and all rules, regulations and ordinancespromulgated thereunder.1.2 Headings and Table of ContentsThe inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will not affect theconstruction or interpretation hereof.1.3 InterpretationIn this Agreement, unless the context otherwise requires:1.3.1 words importing the singular shall include the plural and vice versa, words importing gender shall include all genders orthe neuter, and words importing the neuter shall include all genders;1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, arenot to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items ormatters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of thegeneral term or statement;1.3.3 references to any Person include such Person’s successors and permitted assigns;1.3.4 except as otherwise provided in this Agreement, any reference in this Agreement to a statute, regulation, policy, rule orinstrument shall include, and shall be deemed to be a reference also to, all rules and regulations made under such statute, in thecase of a statute, all amendments made to such statute, regulation, policy, rule or instrument and to any statute, regulation,policy, rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation,policy, rule or instrument so referred to;1.3.5 any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to thisAgreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from timeto time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;5

1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not aBusiness Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite timeon the next succeeding day that is a Business Day; and1.3.7 except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.1.4 Invalidity of ProvisionsEach of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability ofany such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceability of any otherprovision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders any provision ofthis Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace any provisionwhich is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes as close aspossible to that of the invalid or unenforceable provision which it replaces.1.5 Entire AgreementThis Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement. Thereare no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements inconnection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on anywarranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into thisAgreement, or any amendment or supplement hereto, by any party to this Agreement or its directors, officers, employees or agents, toany other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced towriting and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into thisAgreement or any amendment or supplement by reason of any such warranty, representation, opinion, advice or assertion of fact.Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion,advice or assertion of fact, except to the extent contemplated above.1.6 Waiver, AmendmentExcept as expressly provided in this Agreement, no waiver of this Agreement will be binding unless executed in writing by theparty to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of any other provision nor will anywaiver of any provision of this Agreement constitute a continuing waiver unless otherwise expressly provided. A party’s failure ordelay in exercising any right under this6

Agreement will not operate as a waiver of that right. A single or partial exercise of any right will not preclude a party from any otheror further exercise of that right or the exercise of any other right. This Agreement may not be amended or modified in any respectexcept by a written agreement signed by BPY, Brookfield (so long as Brookfield owns any Units) and the Holders of a majority of thethen outstanding Registrable Units.1.7 Governing LawThis Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontario andthe federal laws of Canada applicable therein. Each party irrevocably attorns and submits to the non-exclusive jurisdiction of theOntario courts situated in the City of Toronto and waives objection to the venue of any proceeding in such court or any argument thatsuch court provides an inconvenient forum.2.1 Demand Registration2.1.1 Request for Registration(a)(b)ARTICLE 2REGISTRATION RIGHTSCommencing on the date hereof, any Holder shall have the right to require BPY to file a Registration Statement and/or aProspectus for a public offering of all or part of its Registrable Units (a “Demand Registration”), by delivering to BPYwritten notice stating that such right is being exercised, naming the Holders whose Registrable Units are to be included insuch registration (collectively, the “Demanding Unitholders”), specifying the number of each such DemandingUnitholder’s Registrable Units to be included in such registration and, subject to Section 2.1.3 hereof, describing theintended method of distribution thereof (a “Demand Request”).Each Demand Request shall specify the aggregate number of Registrable Units proposed to be sold. Subject toSection 2.1.6, BPY shall file a Registration Statement and/or Prospectus in respect of a Demand Registration as soon aspracticable and, in any event, within forty-five (45) days after receiving a Demand Request (the “Required Filing Date”)and shall use reasonable best efforts to cause the same to be declared Effective as promptly as practicable after such filing;provided, however, that:(i) BPY shall not be obligated to file a Registration Statement or a Prospectus in respect of a Demand Registrationpursuant to Section 2.1.1(a) within sixty (60) days after the Effective Date of a previous Demand Registration, otherthan a Shelf Registration pursuant to this Article 2; and7

(ii)BPY shall not be obligated to file a Registration Statement or a Prospectus in respect of a Demand Registrationpursuant to Section 2.1.1(a) unless the Demand Request is for (A) a number of Registrable Units with a marketvalue that is equal to at least $50,000,000 as of the date of such Demand Request, or (B) all of the RegistrableSecurities then held by the Demanding Unitholder.2.1.2 Shelf Registration. With respect to any Demand Registration, the Requesting Holders may request BPY to file a ShelfProspectus or effect a Shelf Registration.2.1.3 Selection of Underwriters. At the request of a Requesting Holder, the offering of Registrable Units pursuant to a DemandRegistration shall be in the form of a “firm commitment” underwritten offering. The Requesting Holder shall select theinvestment banking firm or firms to manage the underwritten offering; provided that such selection shall be subject to theconsent of BPY, which consent shall not be unreasonably withheld or delayed. No Holder may participate in any registrationpursuant to Section 2.1.1 unless such Holder (a) agrees to sell such Holder’s Registrable Units on the basis provided in anyunderwriting arrangements described above and (b) completes and executes all questionnaires, powers of attorney, indemnities,underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements;provided, however, that no such Holder shall be required to make any representations or warranties in connection with any suchregistration other than representations and warranties as to (i) such Holder’s ownership of Registrable Units to be transferredfree and clear of all liens, claims, and encumbrances, (ii) such Holder’s power and authority to effect such transfer, and (iii) suchmatters pertaining to compliance with Securities Laws as may be reasonably requested; provided, further, however, that theobligation of such Holder to indemnify pursuant to any such underwriting arrangements shall be several, not joint and several,among such Holders selling Registrable Units, and the liability of each such Holder will be in proportion thereto, and provided,further, that such liability will be limited to the net amount received by such Holder from the sale of its Registrable Unitspursuant to such registration.2.1.4 Rights of Non-Requesting Holders. Upon receipt of any Demand Request, BPY shall promptly (but in any event within ten(10) days) give written notice of such proposed Demand Registration to all other Holders, who shall have the right, exercisableby written notice to BPY within twenty (20) days of their receipt of BPY’s notice, to elect to include in such DemandRegistration such portion of their Registrable Units as they may request. All Holders requesting to have their Registrable Unitsincluded in a Demand Registration in accordance with the preceding sentence and all Demanding Unitholders shall be deemedto be “Requesting Holders” for purposes of this Section 2.1. BPY shall also have the right to issue and sell Units in suchDemand Registration, subject to Section 2.1.5.8

2.1.5 Priority on Demand Registrations. No securities to be sold for the account of any Person (including BPY) other than aRequesting Holder shall be included in a Demand Registration unless the managing underwriter or underwriters shall advise theRequesting Holders in writing that the inclusion of such securities will not adversely affect the price, timing or distribution ofthe offering or otherwise adversely affect its success (an “Adverse Effect”). Furthermore, if the managing underwriter orunderwriters shall advise the Requesting Holders that, even after exclusion of all securities of other Persons (including BPY)pursuant to the immediately preceding sentence, the amount of Registrable Units proposed to be included in such DemandRegistration by Requesting Holders is sufficiently large to cause an Adverse Effect, the Registrable Units of the RequestingHolders to be included in such Demand Registration shall equal the number of Registrable Units which the Requesting Holdersare so advised can be sold in such offering without an Adverse Effect and such Registrable Units shall be allocated pro rataamong the Requesting Holders on the basis of the number of Registrable Units requested to be included in such registration byeach such Requesting Holder.2.1.6 Deferral of Filing. BPY may defer the filing (but not the preparation) of a Registration Statement or Prospectus, asapplicable, required by Section 2.1 until a date not later than ninety (90) days after the Required Filing Date if (a) at the timeBPY receives the Demand Request, BPY is engaged in confidential negotiations or other confidential activities, disclosure ofwhich would be required in such Registration Statement or Prospectus, as applicable (but would not be required if suchRegistration Statement or Prospectus, as applicable, were not filed), and the Board of Directors of the general partner of BPYdetermines in good faith that such disclosure would be materially detrimental to BPY and its unitholders, (b) prior to receivingthe Demand Request, BPY had determined to effect a registered underwritten public offering of BPY’s securities for BPY’saccount and BPY had taken substantial steps (including, but not limited to, selecting a managing underwriter for such offering)and is proceeding with reasonable diligence to effect such offering, or (c) at the time BPY receives the Demand Request, BPY iscurrently engaged in a self-tender or exchange offer and the filing of a Registration Statement or Prospectus, as applicable,would cause a violation of applicable Securities Laws. A deferral of the filing of a Registration Statement or Prospectus, asapplicable, pursuant to this Section 2.1.6 shall be lifted, and the requested Registration Statement or Prospectus, as applicable,shall be filed forthwith, if, in the case of a deferral pursuant to clause (a) of the preceding sentence, the negotiations or otheractivities are disclosed, otherwise become publicly known, or are terminated, or, in the case of a deferral pursuant to clause(b) of the preceding sentence, the proposed registration for BPY’s account is abandoned. In order to defer the filing of aRegistration Statement or Prospectus, as applicable, pursuant to this Section 2.1.6, BPY shall promptly (but in any event withinten (10) days), upon determining to seek such deferral, deliver to the Requesting Holders a certificate signed by an officer or theBoard of Directors of the general partner of BPY stating that BPY is deferring such filing pursuant to this Section 2.1.6 and ageneral statement of the reason for such deferral and an approximation of the anticipated delay. Within twenty (20) days afterreceiving such certificate, the Requesting9

Holder may withdraw such Demand Request by giving notice to BPY; if withdrawn, the Demand Request shall be deemed notto have been made for all purposes of this Agreement. BPY may defer the filing of a particular Registration Statement orProspectus, as applicable, pursuant to this Section 2.1.6 only once.2.2 Piggyback Registrations2.2.1 Right to Piggyback. Each time BPY proposes to (a) register any of its equity securities (other than pursuant to an ExcludedRegistration) under Canadian Securities Laws or U.S. Securities Laws for sale to the public (whether for the account of BPY orthe account of any securityholder of BPY) or (b) sell any of its equity securities (other than pursuant to an ExcludedRegistration) and with respect to which a Shelf Registration or Shelf Prospectus is expressly being utilized to effect such sale,(clause (a) and (b) are each referred to as a “Piggyback Registration”), BPY shall give prompt written notice to each Holder ofRegistrable Units (which notice shall be given not less than twenty (20) days prior to the anticipated filing date of BPY’sRegistration Statement, Shelf Registration or Prospectus, as applicable, or not less than ten (10) days in the case of a “boughtdeal” or “registered direct” financing), which notice shall offer each such Holder the opportunity to include any or all of itsRegistrable Units in such Registration Statement, Shelf Registration or Prospectus, as applicable, subject to the limitationscontained in Section 2.2.2 hereof. Each Holder who desires to have its Registrable Units included in such RegistrationStatement, Shelf Registration or Prospectus, as applicable, shall so advise BPY in writing (stating the number of RegistrableUnits desired to be registered) within ten (10) days after the date of such notice from BPY (or within one (1) Business Day in thecase of a “bought deal” financing). Any Holder shall have the right to withdraw such Holder’s request for inclusion of suchHolder’s Registrable Units in any Registration Statement, Shelf Registration or Prospectus, as applicable, pursuant to thisSection 2.2.1 by giving written notice to BPY of such withdrawal provided, however, that such request is made prior to theexecution of an underwriting agreement (or similar agreement) with respect to such offering. Subject to Section 2.2.2 below,BPY shall include in such Registration Statement, Shelf Registration or Prospectus, as applicable, all such Registrable Units sorequested to be included therein; provided, however, that BPY may at any time withdraw or cease proceeding with any suchregistration or sale if it shall at the same time withdraw or cease proceeding with the registration or sale of all other equitysecurities originally proposed to be registered or sold.2.2.2 Priority on Piggyback Registrations(a) If a Piggyback Registration is an underwritten offering, and if the managing underwriter advises BPY that the inclusion ofRegistrable Units requested to be included in a Registration Statement, Shelf Registration or Prospectus, as applicable,would cause an Adverse Effect, BPY shall only be required to include such number of Registrable Units in suchRegistration Statement, Shelf Registration or Prospectus, as applicable, as such underwriter advises in writing would notcause an Adverse Effect, with priority given as10

(b)follows: (i) first, the securities BPY proposes to sell, (ii) second, the Registrable Units requested to be included in suchRegistration Statement, Shelf Registration or Prospectus, pro rata among the Holders of such Registrable Units on the basisof the number of Registrable Units owned by each such Holder, and (iii) third, any other securities requested to be includedin such Registration Statement, Shelf Registration or Prospectus. If as a result of the provisions of this Section 2.2.2(a) anyHolder shall not be entitled to include all Registrable Units in a Registration Statement, Shelf Registration or Prospectusthat such Holder has requested to be so included, such Holder may withdraw such Holder’s request to include RegistrableUnits in such Registration Statement, Shelf Registration or Prospectus, as applicable.No Holder may participate in any Registration Statement, Shelf Registration or Prospectus, as applicable, in respect of aPiggyback Registration hereunder unless such Holder (i) agrees to sell such Holder’s Registrable Units on the basisprovided in any underwriting arrangements approved by BPY and (ii) completes and executes all questionnaires, powers ofattorney, indemnities, underwriting agreements and other documents, each in customary form, reasonably required underthe terms of such underwriting arrangements; provided, however, that no such Holder shall be required to make anyrepresentations or warranties in connection with any such registration other than representations and warranties as to(A) such Holder’s ownership of Registrable Units to be sold or transferred free and clear of all liens, claims, andencumbrances, (B) such Holder’s power and authority to effect such transfer, and (C) such matters pertaining tocompliance with applicable Securities Laws as may be reasonably requested; provided, further, however, that theobligation of such Holder to indemnify pursuant to any such underwriting arrangements shall be several, not joint andseveral, among such Holders selling Registrable Units, and the liability of each such Holder will be in proportion thereto,and provided, further, that such liability will be limited to the net amount received by such Holder from the sale of itsRegistrable Units pursuant to such Registration Statement, Shelf Registration or Prospectus.2.3 Short-Form Filings(a) SEC Form F-3. BPY shall use its reasonable best efforts to cause Demand Registrations in the United States to beregistered on Form F-3 once BPY becomes eligible to use Form F-3, and if BPY is not then eligible under the U.S.Securities Laws to use Form F-3, Demand Registrations shall be registered on the form for which BPY then qualifies. BPYshall use its reasonable best efforts to become eligible to use Form F-3 and, after becoming eligible to use Form F-3, shalluse its reasonable best efforts to remain so eligible.11

(b)Short-Form Prospectus. BPY shall use its reasonable best efforts to cause Demand Registrations in Canada to be qualifiedby way of a short-form Prospectus prepared pursuant to the POP System if, at the time of such Demand Registration, BPYis a POP Issuer and is able to do so in all of the provinces and territories in which the Demand Registration is to beeffected. For greater certainty, it is acknowledged that in the event that BPY is not a POP Issuer or is unable to utilize thePOP System in one or more Canadian provinces or territories in which the Demand Registration is to be effected, BPYshall proceed by way of long-form Prospectus.2.4 Holdback Agreements(a) BPY shall not effect any public sale or distribution of its equity securities, or any securities convertible into orexchangeable or exercisable for such securities, during the seven (7) days prior to and during the ninety (90)-day periodbeginning on the Effective Date of a Demand Registration (other than a Shelf Registration or Shelf Prospectus, asapplicable) or a Piggyback Registration, except pursuant to registrations on Form S-8 or registrations to effect theacquisition of, or combination with, another Person, or unless the underwriters managing any such public offeringotherwise agree.(b) If any Holders of Registrable Units notify BPY in writing that they intend to effect an underwritten sale of Units on aspecified date registered pursuant to a Shelf Registration or Shelf Prospectus, as applicable, pursuant to Article 2 hereof,BPY shall not effect any public sale or distribution of its equity securities, or any securities convertible into orexchangeable or exercisable for its equity securities, during the seven (7) days prior to and during the ninety (90)-dayperiod beginning on the date specified in such notice, except pursuant to registrations on Form S-8 or registrations to effectthe acquisition of, or combination with, another Person, or unless the underwriters managing any such public offeringotherwise agree.(c) Provided BPY has complied with Section 2.2, each Holder agrees, in the event of an underwritten offering by BPY(whether for the account of BPY or otherwise), not to offer, sell, contract to sell or otherwise dispose of any RegistrableUnits, or any securities convertible into or exchangeable or exercisable for such securities, including any sale pursuant toRule 144 under the U.S. Securities Act (except as part of such underwritten offering), during the seven (7) days prior to,and during the ninety (90)-day period (or such lesser period as the lead or managing underwriters may require) beginningon, the Effective Date for such underwritten offering (or, in the case of an offering pursuant to an effective ShelfRegistration or Shelf Prospectus, the pricing date for such underwritten offering).12

2.5 Registration ProceduresWhenever any Holder has requested that any Registrable Units be registered pursuant to this Agreement, BPY will use itsreasonable best efforts to effect the registration and the sale of such Registrable Units in accordance with the intended method ofdisposition thereof as promptly as is practicable, and pursuant thereto BPY will as expeditiously as possible:(a)(b)(c)prepare and file, pursuant to Section 2.1.1(b) with respect to any Demand Registration, subject to Section 2.3, aRegistration Statement or Prospectus, as applicable, with respect to such Registrable Units and use its reasonable bestefforts to cause such Registration Statement or Prospectus, as applicable, to become Effective; provided that as far inadvance as practicable before filing such Registration Statement or Prospectus, as applicable, or any amendment orsupplement thereto, BPY will furnish to the selling Holders copies of reasonably complete drafts of all such documentsprepared to be filed (including exhibits), and any such Holder shall have the opportunity to object to any informationcontained therein and BPY will make corrections reasonably requested by such Holder with respect to such informationprior to filing any such Registration Statement or Prospectus, as applicable, or any amendment or supplement thereto;except in the case of a Shelf Registration or Shelf Prospectus, prepare and file with the SEC or the applicable CanadianCommissions, such amendments, post-effective amendments and supplements to such Registration Statement orProspectus, as applicable, as may be necessary to keep such Registration Statement or Prospectus, as applicable, effectivefor a period of not less than one hundred eighty (180) days (or such lesser period as is necessary for the underwriters in anunderwritten offering to sell unsold allotments) and comply with the provisions of the applicable Securities Laws withrespect to the disposition of all securities covered by such Registration Statement or Prospectus, as applicable, during suchperiod in accordance with the intended methods of disposition by the sellers thereof set forth in such RegistrationStatement or Prospectus, as applicable;in the case of a Shelf Registration or Shelf Prospectus, prepare and file with the SEC or the applicable CanadianCommissions, as applicable, such amendments and supplements to such Shelf Registration or Shelf Prospectus, asapplicable, as may be necessary to keep such Shelf Registration or Shelf Prospectus, as applicable, effective and to complywith the provisions of the applicable Securities Laws with respect to the disposition of all Registrable Units subject theretofor a period ending on the earlier of (i) twenty four (24) months after the Effective Date and (ii) the date on which all theRegistrable Units subject thereto have been sold pursuant to such Shelf Registration or Shelf Prospectus, as applicable;13

(d)(e)(f)furnish to each seller of Registrable Units and the underwriters of the securities being registered such number of copies ofsuch Registration Statement, Shelf Registration or Prospectus, as applicable (in the English language and, if required, theFrench language), each amendment and supplement thereto, any documents incorporated by reference therein and suchother documents as such seller or underwriters may reasonably request in order to facilitate the disposition of theRegistrable Units owned by such seller or the sale of such securities by such underwriters (it being understood that, subjectto Section 2.6 and the requirements of the applicable Securities Laws, BPY consents to the use of the RegistrationStatement, Shelf Registration and Prospectus, as applicable, and any amendment or supplement thereto by each seller andthe underwriters in connection with the offering and sale of the Registrable Units covered by the Registration Statement,Shelf Registration or Prospectus, as applicable);use its reasonable best efforts to register or qualify such Registrable Units under such other securities or “blue sky” laws ofsuch jurisdictions as the managing underwriter reasonably requests (or, in the event the Registration Statement, ShelfRegistration or Prospectus, as applicable, does not relate to an underwritten offering, as the holders of a majority of suchRegistrable Units may reasonably request); use its reasonable best efforts to keep each such registration or qualification (orexemption therefrom) effective during the period in which such Registration Statement, Shelf Registration or Prospectus,as applicable, is required to be kept effective; and do any and all other acts and things which may be reasonably necessaryor advisable to enable each seller to consummate the disposition of the Registrable Units owned by such seller in suchjurisdictions (provided, however, that BPY will not be required to (i) qualify generally to do business in any jurisdictionwhere it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any suchjurisdiction, or (iii) consent to general service of process in any such jurisdiction);notify each seller and each underwriter and (if requested by any such Person) confirm such notice in writing (i) when anysupplement or amendment to the Registration Statement, Shelf Registration or Prospectus, as applicable, has been filedfollowing the Effective Date, and when the same has become effective, (ii) of the issuance by any state securities or otherregulatory authority of any order suspending the qualification or exemption from qualification of any of the RegistrableUnits under state securities or “blue sky” laws or the initiation of any proceedings for that purpose, and (iii) of thehappening of any event which makes any statement made in the Registration Statement, Shelf Registration or Prospectus,as applicable, untrue or which requires the making of any changes in such Registration Statement, Shelf Registration orProspectus, as applicable, or documents so that they will not contain any untrue statement of a material fact or omit to stateany material fact required to be stated therein or necessary to make the statements therein not misleading, and, as promptly14

(g)(h)(i)(j)(k)as practicable thereafter, prepare and file with the SEC and the applicable Canadian Commissions (as applicable) andfurnish a supplement or amendment to such Registration Statement, Shelf Registration or Prospectus, as applicable, so that,as thereafter deliverable to the purchasers of such Registrable Units, such Registration Statement, Shelf Registration orProspectus, as applicable, will not contain any untrue statement of a material fact or omit a material fact necessary to makethe statements therein, in light of the circumstances under which they were made, not misleading;permit any selling Holder, which in such Holder’s sole and exclusive judgment, might reasonably be deemed to be anunderwriter or a controlling person of BPY, to participate in the preparation of such Registration Statement, ShelfRegistration or Prospectus, as applicable, and to require the insertion therein of material, furnished to BPY in writing,which in the reasonable judgment of such Holder and its counsel should be included;make reasonably available personnel, as selected by the Holders of a majority of the Registrable Units included in suchregistration, for assistance in the selling effort relating to the Registrable Units covered by such registration, including, butnot limited to, the participation of such members of BPY’s management in road show presentations;otherwise use its reasonable best efforts to comply with all applicable Securities Laws, and make generally available toBPY’s securityholders an earnings statement satisfying the provisions of Section 11(a) of the U.S. Securities Act no laterthan thirty (30) days after the end of the twelve (12) month period beginning with the first day of BPY’s first fiscal quartercommencing after the Effective Date, which earnings statement shall cover said twelve (12) month period, and whichrequirement will be deemed to be satisfied if BPY timely files complete and accurate information on Forms 20-F and 6-Kunder the Exchange Act which otherwise complies with Rule 158 under the U.S. Securities Act;if requested by the managing underwriter or any seller, promptly incorporate in a prospectus supplement or post-effectiveamendment such information as the managing underwriter or any seller reasonably requests to be included therein,including, without limitation, with respect to the Registrable Units being sold by such seller, the purchase price being paidtherefor by the underwriters and with respect to any other terms of the underwritten offering of the Registrable Units to besold in such offering, and promptly make all required filings of such prospectus supplement or post-effective amendment;after filing of any document which is incorporated by reference into the Registration Statement or Prospectus, as applicable(in the form in which it was incorporated), deliver a copy of each such document to each seller;15

(l) cooperate with the sellers and the managing underwriter to facilitate the timely preparation and delivery of certificates(which shall not bear any restrictive legends unless required under applicable law) representing securities sold under anyRegistration Statement or Prospectus, as applicable, and enable such securities to be in such denominations and registeredin such names as the managing underwriter or such sellers may request and keep available and make available to BPY’stransfer agent prior to the Effective Date a supply of such certificates;(m) make available for inspection by any seller, any underwriter participating in any disposition pursuant to any RegistrationStatement or Prospectus, as applicable, and any attorney, accountant or other agent or representative retained by any suchseller or underwriter (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents andproperties of BPY (collectively, the “Records”), as shall be reasonably necessary to enable them to exercise their duediligence responsibility, and cause BPY’s officers, directors and employees to supply all information requested by anysuch Inspector in connection with such Registration Statement or Prospectus, as applicable; provided, however, that, unlessthe disclosure of such Records is necessary to avoid or correct a misstatement or omission in the Registration Statement orProspectus, as applicable, or the release of such Records is ordered pursuant to a subpoena or other order from a court ofcompetent jurisdiction, BPY shall not be required to provide any information under this subparagraph (m) if (i) BPYbelieves, after consultation with counsel for BPY, that to do so would cause BPY to forfeit an attorney-client privilege thatwas applicable to such information or (ii) if either (x) BPY has requested and been granted from the SEC or a CanadianCommission confidential treatment of such information contained in any filing with the SEC or a Canadian Commission ordocuments provided supplementally or otherwise or (y) BPY reasonably determines in good faith that such Records areconfidential and so notifies the Inspectors in writing, unless prior to furnishing any such information with respect to clause(ii) such Holder of Registrable Units requesting such information agrees to enter into a confidentiality agreement incustomary form and subject to customary exceptions; and provided, further, that each Holder of Registrable Units agreesthat it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to BPYand allow BPY, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemedconfidential;(n) furnish to each seller and underwriter a signed counterpart of (i) an opinion or opinions of counsel to BPY, (ii) a comfortletter or comfort letters from BPY’s independent auditors, addressed to the underwriters, each in customary form andcovering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as the managingunderwriter reasonably requests, and (iii) if a Prospectus is filed in Quebec, opinions of Quebec counsel to BPY and theauditors of BPY addressed to the Holder and the underwriter or underwriters of such distribution relating to the translationof the Prospectus;16

(o)(p)(q)(r)(s)(t)(u)cause the Registrable Units included in any Prospectus or Registration Statement, as applicable to be listed on the TorontoStock Exchange and on the New York Stock Exchange;provide and cause to be maintained a transfer agent and registrar for all Registrable Units registered hereunder;cooperate with each seller and each underwriter participating in the disposition of such Registrable Units and theirrespective counsel in connection with any filings required to be made with FINRA;during the period when the Registration Statement or Prospectus, as applicable, is required to be delivered under theapplicable Securities Laws, promptly file all documents required to be filed with the SEC pursuant to Sections 13(a), 13(c),14 or 15(d) of the Exchange Act or with the Canadian Commissions pursuant to Canadian Securities Laws;notify each seller of Registrable Units promptly of any request by the SEC or a Canadian Commission for the amending orsupplementing of such Registration Statement or Prospectus, as applicable, or for additional information;enter into such agreements (including underwriting agreements in the managing underwriter’s customary form) as arecustomary in connection with an underwritten registration; andadvise each seller of such Registrable Units, promptly after it shall receive notice or obtain knowledge thereof, of theissuance of any stop order or ruling by the SEC or a Canadian Commission suspending the effectiveness of suchRegistration Statement or Prospectus, as applicable, or the initiation or threatening of any proceeding for such purpose andpromptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal at the earliestpossible moment if such stop order should be issued.2.6 Suspension of DispositionsEach Holder agrees by acquisition of any Registrable Units that, upon receipt of any notice (a “Suspension Notice”) from BPYof the happening of any event of the kind described in Section 2.5(f)(iii) such Holder will forthwith discontinue disposition ofRegistrable Units until such Holder’s receipt of the copies of the supplemented or amended Registration Statement or Prospectus, asapplicable, or until it is advised in writing (the “Advice”) by BPY that the use of the Registration Statement or Prospectus, asapplicable, may be resumed, and has received copies of any additional or supplemental filings which are incorporated by reference inthe Registration Statement or Prospectus,17

as applicable, and, if so directed by BPY, such Holder will deliver to BPY all copies, other than permanent file copies then in suchHolder’s possession, of the Registration Statement or Prospectus, as applicable, covering such Registrable Units current at the time ofreceipt of such notice. In the event BPY shall give any such notice, the time period regarding the effectiveness of RegistrationStatements or Prospectuses, as applicable, set forth in Sections 2.5(b) and 2.5(c) hereof shall be extended by the number of daysduring the period from and including the date of the giving of the Suspension Notice to and including the date when each seller ofRegistrable Units covered by such Registration Statement or Prospectus, as applicable, shall have received the copies of thesupplemented or amended Registration Statement or Prospectus, as applicable, or the Advice. BPY shall use its reasonable bestefforts and take such actions as are reasonably necessary to render the Advice as promptly as practicable.2.7 Registration ExpensesAll fees and expenses incident to any registration including, without limitation, BPY’s performance of or compliance with thisArticle 2, all registration and filing fees, all fees and expenses associated with filings required to be made with FINRA (including, ifapplicable, the reasonable fees and expenses of any “qualified independent underwriter” and of its counsel), as may be required by therules and regulations of FINRA, fees and expenses of compliance with securities or “blue sky” laws (including reasonable fees anddisbursements of counsel in connection with “blue sky” qualifications of the Registrable Units), rating agency fees, printing expenses(including expenses of printing certificates for the Registrable Units and of printing prospectuses), messenger and delivery expenses,the fees and expenses incurred in connection with any listing or quotation of the Registrable Units, fees and expenses of counsel forBPY and its independent auditors (including the expenses of any special audit or “cold comfort” letters required by or incident to suchperformance), the fees and expenses of any special experts retained by BPY in connection with such registration, and the fees andexpenses of other persons retained by BPY, will be borne by BPY (unless paid by a security holder that is not a Holder for whoseaccount the registration is being effected) whether or not any Registration Statement or Prospectus becomes Effective; provided,however, that any underwriting discounts, commissions, or fees attributable to the sale of the Registrable Units will be borne by theHolders pro rata on the basis of the number of Units so registered and the fees and expenses of any counsel, accountants, or otherpersons retained or employed by any Holder will be borne by such Holder.2.8 Indemnification2.8.1 BPY agrees to indemnify and reimburse, to the fullest extent permitted by law, each seller of Registrable Units, and eachof its employees, advisors, agents, representatives, partners, officers, and directors and each Person who Controls such seller andany agent or investment advisor thereof (collectively, the “Seller Affiliates”) (a) against any and all losses, claims, damages,liabilities, and expenses, joint or several (including, without limitation, reasonable attorneys’ fees and disbursements except aslimited by Section 2.8.3) based upon, arising out of, related to or resulting from any untrue or alleged untrue statement of amaterial fact18

contained in any Registration Statement or Prospectus or any amendment thereof or supplement thereto, or any omission oralleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading,(b) against any and all loss, liability, claim, damage, and expense whatsoever, as incurred, to the extent of the aggregate amountpaid in settlement of any litigation or investigation or proceeding by any governmental agency or body, commenced orthreatened, or of any claim whatsoever based upon, arising out of, related to or resulting from any such untrue statement oromission or alleged untrue statement or omission, and (c) against any and all costs and expenses (including reasonable fees anddisbursements of counsel) as may be reasonably incurred in investigating, preparing, or defending against any litigation, orinvestigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever basedupon, arising out of, related to or resulting from any such untrue statement or omission or alleged untrue statement or omission,or violation of the Securities Laws, to the extent that any such expense or cost is not paid under subparagraph (a) or (b) above;except insofar as any such statements are made in reliance upon and in strict conformity with information furnished in writing toBPY by such seller or any Seller Affiliate for use therein or arise from such seller’s or any Seller Affiliate’s failure to deliver acopy of the Registration Statement or Prospectus or any amendments or supplements thereto after BPY has furnished such selleror Seller Affiliate with a sufficient number of copies of the same. The reimbursements required by this Section 2.8.1 will bemade by periodic payments during the course of the investigation or defense, as and when bills are received or expensesincurred.2.8.2 In connection with any Registration Statement or Prospectus in which a seller of Registrable Units is participating, eachsuch seller will furnish to BPY in writing such information and affidavits as BPY reasonably requests for use in connection withany such Registration Statement or Prospectus, as applicable, and, to the fullest extent permitted by law, each such seller willindemnify BPY and each of its employees, advisors, agents, representatives, partners, officers and directors and each Personwho Controls BPY (excluding such seller or any Seller Affiliate) and any agent or investment advisor thereof against any and alllosses, claims, damages, liabilities, and expenses (including, without limitation, reasonable attorneys’ fees and disbursementsexcept as limited by Section 2.8.3) resulting from any untrue statement or alleged untrue statement of a material fact containedin the Registration Statement or Prospectus, as applicable, or any amendment thereof or supplement thereto or any omission oralleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, butonly to the extent that such untrue statement or alleged untrue statement or omission or alleged omission is contained in anyinformation or affidavit so furnished in writing by such seller or any of its Seller Affiliates specifically for inclusion in theRegistration Statement or Prospectus, as applicable; provided that the obligation to indemnify will be several, not joint andseveral, among such sellers of Registrable Units, and the liability of each such seller of Registrable Units will be in proportionto, and will be limited to, the net amount received by such seller from the sale of Registrable Units pursuant to such Registration19

Statement or Prospectus, as applicable; provided, however, that such seller of Registrable Units shall not be liable in any suchcase to the extent that prior to the filing of any such Registration Statement or Prospectus, as applicable, or amendment thereofor supplement thereto, such seller has furnished in writing to BPY information expressly for use in such Registration Statementor Prospectus, as applicable, or any amendment thereof or supplement thereto which corrected or made not misleadinginformation previously furnished to BPY.2.8.3 Any Person entitled to indemnification hereunder will (a) give prompt written notice to the indemnifying party of anyclaim with respect to which it seeks indemnification (provided that the failure to give such notice shall not limit the rights ofsuch Person) and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified andindemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claimwith counsel reasonably satisfactory to the indemnified party; provided, however, that any person entitled to indemnificationhereunder shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees andexpenses of such counsel shall be at the expense of such person unless (i) the indemnifying party has agreed to pay such fees orexpenses, (ii) the indemnifying party shall have failed to assume the defense of such claim and employ counsel reasonablysatisfactory to such person, or (iii) such counsel has been retained due to a conflict as described below. If such defense is notassumed by the indemnifying party as permitted hereunder, the indemnifying party will not be subject to any liability for anysettlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld or delayed). Ifsuch defense is assumed by the indemnifying party pursuant to the provisions hereof, such indemnifying party shall not settle orotherwise compromise the applicable claim unless (A) such settlement or compromise contains a full and unconditional releaseof the indemnified party without any admission of liability on the part of such indemnified party or (B) the indemnified partyotherwise consents in writing. An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim willnot be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying partywith respect to such claim (together with appropriate local counsel), unless in the reasonable judgment of any indemnified party,a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to suchclaim, in which event the indemnifying party shall be obligated to pay the reasonable fees and disbursements of such additionalcounsel or counsels.2.8.4 Each party hereto agrees that, if for any reason the indemnification provisions contemplated by Section 2.8.1 orSection 2.8.2 are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages,liabilities, or expenses (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to theamount paid or payable by such indemnified party as a result of such losses, claims, liabilities, or expenses (or actions in respectthereof) in such proportion as is appropriate to reflect the relative20

fault of the indemnifying party and the indemnified party in connection with the actions which resulted in the losses, claims,damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of such indemnifyingparty and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untruestatement of a material fact or omission or alleged omission to state a material fact relates to information supplied by suchindemnifying party or indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity tocorrect or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributionpursuant to this Section 2.8.4 were determined by pro rata allocation (even if the Holders or any underwriters or all of them weretreated as one entity for such purpose) or by any other method of allocation which does not take account of the equitableconsiderations referred to in this Section 2.8.4. The amount paid or payable by an indemnified party as a result of the losses,claims, damages, liabilities, or expenses (or actions in respect thereof) referred to above shall be deemed to include any legal orother fees or expenses reasonably incurred by such indemnified party in connection with investigating or, except as provided inSection 2.8.3, defending any such action or claim. Notwithstanding the provisions of this Section 2.8.4, no Holder shall berequired to contribute an amount greater than the dollar amount by which the net proceeds received by such Holder with respectto the sale of any Registrable Units exceeds the amount of damages which such Holder has otherwise been required to pay byreason of any and all untrue or alleged untrue statements of material fact or omissions or alleged omissions of material fact madein any Registration Statement or Prospectus, as applicable, or any amendment thereof or supplement thereto related to such saleof Registrable Units. No person guilty of fraudulent misrepresentation shall be entitled to contribution from any person who wasnot guilty of such fraudulent misrepresentation. The Holders’ obligations in this Section 2.8.4 to contribute shall be several inproportion to the amount of Registrable Units registered by them and not joint.2.8.5 If indemnification is available under this Section 2.8, the indemnifying parties shall indemnify each indemnified party tothe full extent provided in Section 2.8.1 and Section 2.8.2 without regard to the relative fault of said indemnifying party orindemnified party or any other equitable consideration provided for in Section 2.8.4 subject, in the case of the Holders, to thelimited dollar amounts set forth in Section 2.8.2.2.8.6 The indemnification and contribution provided for under this Agreement will remain in full force and effect regardless ofany investigation made by or on behalf of the indemnified party or any officer, director, or controlling Person of suchindemnified party and will survive the transfer of securities.2.9 Transfer of Registration RightsThe rights of each Holder under this Agreement may, in the Holder’s discretion, be assigned, in whole or in part, to any direct orindirect transferee of all or any portion of21

such Holder’s Registrable Units who agrees in writing to be subject to and bound by all the terms and conditions of this Agreement.For greater certainty, in the case of a transfer of less than all of such Holder’s Registrable Units, no such assignment will limit orotherwise impair the transferor’s rights under this Agreement.2.10 Current Public InformationBPY will file the reports required to be filed by it under applicable Securities Laws (or, if BPY is not required to file suchreports, will, upon the request of the Holders, make publicly available other information) and will take such further action as any ofthe Holders may reasonably request, all to the extent required from time to time to enable the Holders to sell Registrable Securitieswithout registration under, and subject to the limitations of, applicable Securities Laws. Upon the reasonable request of any Holder,BPY will deliver to such parties a written statement as to whether it has complied with such requirements and will, at its expense,forthwith upon the request of any such Holder, deliver to such Holder a certificate, signed by an officer, stating (a) BPY’s name,address and telephone number (including area code), (b) BPY’s Internal Revenue Service identification number and Business Numberissued by the Canada Revenue Agency, (c) BPY’s SEC and SEDAR file numbers, (d) the number of Units outstanding as shown bythe most recent report or statement published by BPY, and (e) whether BPY has filed the reports required to be filed under theapplicable Securities Laws for a period or at least ninety (90) days prior to the date of such certificate and in addition has filed themost recent annual report required to be filed thereunder.2.11 Preservation of RightsBPY will not directly or indirectly (a) grant any registration rights to third parties which are more favorable than or inconsistentwith the rights granted hereunder or (b) enter into any agreement, take any action, or permit any change to occur, with respect to itssecurities that violates or subordinates the rights expressly granted to the Holders in this Agreement.ARTICLE 3TERMINATION3.1 TerminationThe Holders may exercise the registration rights granted hereunder in such manner and proportions as they shall agree amongthemselves. The registration rights hereunder shall cease to apply to any particular Registrable Unit when: (a) a RegistrationStatement or Prospectus, as applicable, with respect to the sale of such Units (or other securities) shall have become Effective andsuch Units shall have been disposed of in accordance with such Registration Statement or Prospectus, as applicable; (b) such Units (orother securities) shall have been sold to the public pursuant to an exemption under applicable Securities Laws; (c) such Units (or othersecurities) shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall22

have been delivered by BPY and subsequent public distribution of them shall not require registration under applicable SecuritiesLaws; (d) such Units (or other securities) shall have ceased to be outstanding; or (e) such Registrable Units are eligible for salepursuant to Rule 144(b)(1) (without the requirement for BPY to be in compliance with the current public information required underRule 144) under the U.S. Securities Act. BPY shall promptly upon the request of any Holder furnish to such Holder evidence of thenumber of Registrable Units then outstanding.ARTICLE 4MISCELLANEOUS4.1 EnurementThis Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and permittedassigns.4.2 NoticesAny notice or other communication required or permitted to be given hereunder will be in writing and will be given by prepaidfirst-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Any suchnotice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance of postalservice due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after the post-markeddate thereof, or if sent by facsimile or other means of electronic communication, will be deemed to have been received on theBusiness Day following the sending, or if delivered by hand will be deemed to have been received at the time it is delivered to theapplicable address noted below either to the individual designated below or to an individual at such address having apparent authorityto accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of ageneral discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered byhand or sent by facsimile or other means of electronic communication and will be deemed to have been received in accordance withthis section. Notices and other communications will be addressed as follows:4.2.1 if to Brookfield:Brookfield Asset Management Inc.Brookfield Place, 181 Bay StreetSuite 300, P.O. Box 762Toronto, Ontario M5J 2T3Attention: Vice President, Legal Affairs23

4.2.2 if to BPY:Brookfield Property Partners Limited73 Front StreetHamilton HM 12 BermudaAttention: Secretaryor to such other addresses as a party may from time to time notify the other in accordance with this Section 4.2.If to any other Holder, the address indicated for such Holder in BPY’s stock transfer records with copies, so long as Brookfieldowns any Registrable Units, to Brookfield as provided above.4.3 AuthorityEach of the parties hereto represents to the other that (a) it has the corporate or partnership power and authority to execute,deliver and perform this Agreement, (b) the execution, delivery and performance of this Agreement by it has been duly authorized byall necessary corporate or partnership action and no such further action is required, (c) it has duly and validly executed and deliveredthis Agreement, and (d) this Agreement is a legal, valid and binding obligation, enforceable against it in accordance with its termssubject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generallyand general equity principles.4.4 Further AssurancesEach of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, all suchfurther acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of giving effectto this Agreement and will use commercially reasonable efforts and take all such steps as may be reasonably within its power toimplement to their full extent the provisions of this Agreement.4.5 CounterpartsThis Agreement may be signed in counterparts and each of such counterparts will constitute an original document and suchcounterparts, taken together, will constitute one and the same instrument.[NEXT PAGE IS SIGNATURE PAGE]24

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT INC.By:Name:Title:BROOKFIELD PROPERTY PARTNERS L.P.,by its general partner, BROOKFIELD PROPERTYPARTNERS LIMITEDBy:Name:Title:

Exhibit 4.6BROOKFIELD ASSET MANAGEMENT INC.- and -BROOKFIELD PROPERTY GENERAL PARTNER LIMITED- and -BROOKFIELD PROPERTY PARTNERS L.P.FORM OF VOTING AGREEMENT, 2012

TABLE OF CONTENTSARTICLE 1INTERPRETATION 21.1 Definitions 21.2 Headings and Table of Contents 31.3 Interpretation 31.4 Invalidity of Provisions 41.5 Entire Agreement 41.6 Waiver, Amendment 41.7 Governing Law 5ARTICLE 2VOTING 52.1 Voting at the Direction of BPY 52.2 Slate of Nominees and General Guidelines 62.3 Removal of General Partner 6ARTICLE 3REPRESENTATIONS AND WARRANTIES 73.1 Representations and Warranties of Brookfield 73.2 Representations and Warranties of the Property General Partner 73.3 Representations and Warranties of BPY 8ARTICLE 4TERMINATION 94.1 Term 94.2 Termination 9ARTICLE 5GENERAL PROVISIONS 95.1 Assignment 95.2 General Prohibition on Transfer 95.3 Permitted Transfers 95.4 Enurement 95.5 Notices 105.6 Further Assurances 115.7 Counterparts 11

BETWEEN:RECITALS:VOTING AGREEMENTTHIS AGREEMENT made as of the day of , 2012.BROOKFIELD ASSET MANAGEMENT INC. (“Brookfield”)- and -BROOKFIELD PROPERTY GENERAL PARTNER LIMITED(the “Property General Partner”)- and -BROOKFIELD PROPERTY PARTNERS L.P. (“BPY”)WHEREAS Brookfield, a corporation existing under the laws of the Province of Ontario, owns 100% of the common shares(the “Common Shares”) of the Property General Partner, a corporation existing under the laws of Bermuda;AND WHEREAS the Property General Partner is the general partner of Brookfield Property GP L.P. (the “Property GP LP”);AND WHEREAS the Property GP LP is the general partner of Brookfield Property L.P. (the “Property Partnership”);AND WHEREAS Brookfield, the Property General Partner and BPY, a publicly-traded global real estate partnership, havedetermined that it is advisable for BPY to have control over the voting of the Common Shares and the general partner units in theProperty GP LP and the Property Partnership;AND WHEREAS Brookfield, the Property General Partner and BPY wish to enter into this Agreement to govern theirrelationship with respect to the voting of the Common Shares and general partner units in the Property GP LP and the PropertyPartnership;NOW THEREFORE in consideration of one dollar ($1.00) and other good and valuable consideration (the receipt andsufficiency of which is hereby acknowledged), the parties covenant and agree, each with the other, as follows:

ARTICLE 1INTERPRETATION1.1 DefinitionsIn this Agreement, except where the context otherwise requires, the following terms will have the following meanings:1.1.1 “Affiliate” means, with respect to a Person, any other Person that, directly or indirectly, through one or moreintermediaries, Controls or is Controlled by such Person, or is under common Control of a third Person;1.1.2 “Agreement” means this Voting Agreement;1.1.3 “Business Day” means every day except a Saturday or Sunday, or a day which is a statutory or civic holiday in Bermuda,the Province of Ontario, or the State of New York;1.1.4 “Control” means the control by one Person of another Person in accordance with the following: a Person (“A”) controlsanother Person (“B”) where A has the power to determine the management and policies of B by contract or status (for example,the status of A being the general partner of B) or by virtue of the beneficial ownership of or control over a majority of the votinginterests in B; and, for greater certainty and without limitation, if A owns or has control over shares or other securities to whichare attached more than 50% of the votes permitted to be cast in the election of directors to the Governing Body of B, or A is thegeneral partner of B, a limited partnership, then in each case A Controls B for this purpose; and the term “Controlled” has thecorresponding meaning;1.1.5 “Effective Date” means the date of this Agreement;1.1.6 “Governing Body” means (i) with respect to a corporation or limited company, the board of directors of such corporationor limited company, (ii) with respect to a limited liability company, the manager(s) or managing partner(s) of such limitedliability company, (iii) with respect to a partnership, the board, committee or other body of each general partner or managingpartner of such partnership, that serves a similar function (or if any such general partner or managing partner is itself apartnership, the board, committee or other body of such general or managing partner’s general or managing partner that serves asimilar function), and (iv) with respect to any other Person, the body of such Person that serves a similar function, and in thecase of each of (i) through (iv) includes any committee or other subdivision of such body and any Person to whom such bodyhas delegated any power or authority, including any officer or managing director;1.1.7 “Person” means any natural person, partnership, limited partnership, limited liability partnership, joint venture, syndicate,sole proprietorship, company or corporation (with or without share capital), limited liability corporation, unlimited liabilitycompany, joint stock company, unincorporated association, trust, trustee, executor, administrator or other legal personalrepresentative, regulatory body or agency, government or governmental agency, authority or entity however designated orconstituted and pronouns have a similarly extended meaning;-2 -

1.1.8 “Term” has the meaning ascribed thereto in Section 4.1; and1.1.9 “Transfer” includes any sale, exchange, assignment, gift, bequest, disposition, mortgage, hypothecation, charge, pledge,encumbrance, grant of security interest or other arrangement by which possession, legal title, registered ownership, beneficialownership or the right to receive proceeds or benefits of or from the subject matter passes from one Person to another, or to thesame Person in a different capacity, whether or not voluntary and whether or not for value, and any agreement to effect any ofthe foregoing.1.2 Headings and Table of ContentsThe inclusion of headings and a table of contents in this Agreement are for convenience of reference only and will notaffect the construction or interpretation hereof.1.3 InterpretationIn this Agreement, unless the context otherwise requires:1.3.1 words importing the singular shall include the plural and vice versa, words importing gender shall include all genders orthe neuter, and words importing the neuter shall include all genders;1.3.2 the words “include”, “includes”, “including”, or any variations thereof, when following any general term or statement, arenot to be construed as limiting the general term or statement to the specific items or matters set forth or to similar items ormatters, but rather as referring to all other items or matters that could reasonably fall within the broadest possible scope of thegeneral term or statement;1.3.3 references to any Person include such Person’s successors and permitted assigns;1.3.4 except as otherwise provided in this Agreement, any reference in this Agreement to a statute, regulation, policy, rule orinstrument shall include, and shall be deemed to be a reference also to, all rules and regulations made under such statute, in thecase of a statute, all amendments made to such statute, regulation, policy, rule or instrument, and any statute, regulation, policy,rule or instrument that may be passed which has the effect of supplementing or superseding the statute, regulation, policy, rule orinstrument so referred to;1.3.5 any reference to this Agreement or any other agreement, document or instrument shall be construed as a reference to thisAgreement or, as the case may be, such other agreement, document or instrument as the same may have been, or may from timeto time be, amended, varied, replaced, amended and restated, supplemented or otherwise modified;-3 -

1.3.6 in the event that any day on which any amount is to be determined or any action is required to be taken hereunder is not aBusiness Day, then such amount shall be determined or such action shall be required to be taken at or before the requisite timeon the next succeeding day that is a Business Day; and1.3.7 except where otherwise expressly provided, all amounts in this Agreement are stated and shall be paid in U.S. currency.1.4 Invalidity of ProvisionsEach of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity orunenforceability of any such provision or part thereof by a court of competent jurisdiction will not affect the validity or enforceabilityof any other provision hereof. To the extent permitted by applicable law, the parties waive any provision of law which renders anyprovision of this Agreement invalid or unenforceable in any respect. The parties will engage in good faith negotiations to replace anyprovision which is declared invalid or unenforceable with a valid and enforceable provision, the economic effect of which comes asclose as possible to that of the invalid or unenforceable provision which it replaces.1.5 Entire AgreementThis Agreement constitutes the entire agreement between the parties pertaining to the subject matter of this Agreement.There are no warranties, conditions, or representations (including any that may be implied by statute) and there are no agreements inconnection with such subject matter except as specifically set forth or referred to in this Agreement. No reliance is placed on anywarranty, representation, opinion, advice or assertion of fact made either prior to, contemporaneous with, or after entering into thisAgreement, or any amendment or supplement hereto, by any party to this Agreement or its directors, officers, employees or agents, toany other party to this Agreement or its directors, officers, employees or agents, except to the extent that the same has been reduced towriting and included as a term of this Agreement, and none of the parties to this Agreement has been induced to enter into thisAgreement or any amendment or supplement by reason of any such warranty, representation, opinion, advice or assertion of fact.Accordingly, there will be no liability, either in tort or in contract, assessed in relation to any such warranty, representation, opinion,advice or assertion of fact, except to the extent contemplated above.1.6 Waiver, AmendmentExcept as expressly provided in this Agreement, no amendment or waiver of this Agreement will be binding unlessexecuted in writing by the party to be bound thereby. No waiver of any provision of this Agreement will constitute a waiver of anyother provision nor will any waiver of any provision of this Agreement constitute a continuing waiver unless otherwise expresslyprovided. A party’s failure or delay in exercising any right under this Agreement will not operate as a waiver of that right. A single orpartial exercise of any right will not preclude a party from any other or further exercise of that right or the exercise of any other right.-4 -

1.7 Governing LawThis Agreement will be governed by and interpreted and enforced in accordance with the laws of the Province of Ontarioand the federal laws of Canada applicable therein. Each party irrevocably attorns and submits to the non-exclusive jurisdiction of theOntario courts situated in the City of Toronto and waives objection to the venue of any proceeding in such court or any argument thatsuch court provides an inconvenient forum.ARTICLE 2VOTING2.1 Voting at the Direction of BPYEach of Brookfield and the Property General Partner agree that it will vote (and it will cause any other entity that itControls to vote) or otherwise exercise rights with respect to the Common Shares and the general partner units in the Property GP LPand the Property Partnership as follows:2.1.1 in favour of the election of directors approved by BPY provided such directors meet the requirements stipulated under thebye-laws of the Property General Partner and any other applicable laws to which the Property General Partner may be subjectfrom time to time; and2.1.2 in accordance with the direction of BPY with respect to the approval or rejection of the following matters relating to theProperty General Partner:2.1.2.1 any sale of all or substantially all of its assets;2.1.2.2 any merger, amalgamation, consolidation, business combination or other material corporate transaction, except inconnection with any internal reorganization that does not result in a change of control;2.1.2.3 any plan or proposal for a complete or partial liquidation or dissolution, or any reorganization or any case,proceeding or action seeking relief under any existing laws or future laws relating to bankruptcy or insolvency; or2.1.2.4 any commitment or agreement to do any of the foregoing;2.1.3 in accordance with the direction of BPY with respect to the approval or rejection of the following matters relating to theProperty GP LP:2.1.3.1 any sale of all or substantially all of its assets;2.1.3.2 any merger, amalgamation, consolidation, business combination or other material corporate transaction, except inconnection with any internal reorganization that does not result in a change of control;-5 -

2.1.3.3 any plan or proposal for a complete or partial liquidation or dissolution, or any reorganization or any case,proceeding or action seeking relief under any existing laws or future laws relating to bankruptcy or insolvency;2.1.3.4 any amendment to the limited partnership agreement of the Property GP LP; or2.1.3.5 any commitment or agreement to do any of the foregoing;2.1.4 in accordance with the direction of BPY with respect to the approval or rejection of the following matters relating to theProperty Partnership:2.1.4.1 any sale of all or substantially all of its assets;2.1.4.2 any merger, amalgamation, consolidation, business combination or other material corporate transaction, except inconnection with any internal reorganization that does not result in a change of control;2.1.4.3 any plan or proposal for a complete or partial liquidation or dissolution, or any reorganization or any case,proceeding or action seeking relief under any existing laws or future laws relating to bankruptcy or insolvency; or2.1.4.4 any amendment to the limited partnership agreement of the Property Partnership;2.1.4.5 any commitment or agreement to do any of the foregoing.2.2 Slate of Nominees and General GuidelinesFor purposes of Section 2.1, BPY may maintain, from time to time, an approved slate of nominees or provide writtendirection to Brookfield and/or the Property General Partner with respect to the approval or rejection of any matter in the form ofgeneral guidelines, policies or procedures in which case no further approval or direction will be required. Any such generalguidelines, policies or procedures may be modified by BPY in its discretion.2.3 Removal of General PartnerBrookfield agrees that it will not (and it will cause any other entity that it Controls not to) exercise its right under thelimited partnership agreement for the Property GP LP to remove the Property General Partner as general partner of the Property GPLP except with the prior written consent of BPY.-6 -

ARTICLE 3REPRESENTATIONS AND WARRANTIES3.1 Representations and Warranties of BrookfieldBrookfield hereby represents and warrants to BPY and the Property General Partner that:3.1.1 it is validly organized and existing under the relevant laws governing its formation and existence;3.1.2 it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;3.1.3 it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;3.1.4 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and willnot contravene, breach or result in any default under its articles, by-laws, constituent documents or other organizationaldocuments;3.1.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by it of this Agreement; and3.1.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms,subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of generalapplication limiting the enforcement of creditors’ rights and remedies generally, and (ii) general principles of equity, includingstandards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability ofequitable remedies, whether such principles are considered in a proceeding at law or in equity.3.2 Representations and Warranties of the Property General PartnerThe Property General Partner hereby represents and warrants to BPY and Brookfield that:3.2.1 it is validly organized and existing under the relevant laws governing its formation and existence;3.2.2 it has the power, capacity and authority to enter into this Agreement and to perform its duties and obligations hereunder;3.2.3 it has taken all necessary action to authorize the execution, delivery and performance of this Agreement;-7 -

3.2.4 the execution and delivery of this Agreement by it and the performance by it of its obligations hereunder do not and willnot contravene, breach or result in any default under its articles, by-laws, constituent documents or other organizationaldocuments;3.2.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by it of this Agreement; and3.2.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms,subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of generalapplication limiting the enforcement of creditors’ rights and remedies generally, and (ii) general principles of equity, includingstandards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability ofequitable remedies, whether such principles are considered in a proceeding at law or in equity.3.3 Representations and Warranties of BPYBPY hereby represents and warrants to Brookfield and the Property General Partner that:3.3.1 it and its general partner are validly organized and existing under the relevant laws governing their formation andexistence;3.3.2 its general partner on its behalf has the power, capacity and authority to enter into this Agreement and to perform its dutiesand obligations hereunder;3.3.3 its general partner on its behalf has taken all necessary action to authorize the execution, delivery and performance of thisAgreement;3.3.4 the execution and delivery of this Agreement by its general partner on its behalf and the performance by it of itsobligations hereunder do not and will not contravene, breach or result in any default under its articles, bye-laws, constituentdocuments or other organizational documents;3.3.5 no authorization, consent or approval, or filing with or notice to any Person is required in connection with the execution,delivery or performance by its general partner on its behalf of this Agreement; and3.3.6 this Agreement constitutes a valid and legally binding obligation of it enforceable against it in accordance with its terms,subject to (i) applicable bankruptcy, insolvency, moratorium, fraudulent conveyance, reorganization and other laws of generalapplication limiting the enforcement of creditors’ rights and remedies generally, and (ii) general principles of equity, includingstandards of materiality, good faith, fair dealing and reasonableness, equitable defenses and limits as to the availability ofequitable remedies, whether such principles are considered in a proceeding at law or in equity.- 8 -

ARTICLE 4TERMINATION4.1 TermThe term of this Agreement (“Term”) will begin on the Effective Date and will continue in full force and effect untilterminated in accordance with Section 4.2.4.2 TerminationThe rights and obligations of the parties to this Agreement will terminate and no longer be of any effect (i) at such time thatBPY ceases to own, directly or indirectly, through wholly-owned Affiliates of BPY or Brookfield, any limited partnership interest inthe Property Partnership, (ii) upon 30 days’ notice given by BPY, (iii) at such time that Brookfield Property Partners Limited (or itssuccessors or permitted assigns) involuntarily ceases to be the general partner of BPY, (iv) at such time that the Property GP LP (orits successors or permitted assigns) involuntarily ceases to be the general partner of the Property Partnership, or (v) at such time thatthe Property General Partner (or its successors or permitted assigns) involuntarily ceases to be the general partner of the Property GPLP.ARTICLE 5GENERAL PROVISIONS5.1 Assignment5.1.1 None of the rights or obligations hereunder shall be assignable or transferable by any party without the prior writtenconsent of the other parties.5.1.2 Any purported assignment of this Agreement in violation of this Section 5.1 shall be null and void.5.2 General Prohibition on TransferDuring the term of this Agreement, and except with the prior written consent of BPY or as otherwise permitted by thisAgreement, no Transfers of the Common Shares are permitted.5.3 Permitted TransfersBrookfield may Transfer Common Shares to any of its Affiliates provided that the transferee executes an instrument inwriting agreeing to be bound by this Agreement.5.4 EnurementThis Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors andpermitted assigns.-9 -

5.5 NoticesAny notice or other communication required or permitted to be given hereunder will be in writing and will be given byprepaid first-class mail, by facsimile or other means of electronic communication or by hand-delivery as hereinafter provided. Anysuch notice or other communication, if mailed by prepaid first-class mail at any time other than during a general discontinuance ofpostal service due to strike, lockout or otherwise, will be deemed to have been received on the fourth Business Day after the postmarkeddate thereof, or if sent by facsimile or other means of electronic communication, will be deemed to have been received on theBusiness Day following the sending, or if delivered by hand will be deemed to have been received at the time it is delivered to theapplicable address noted below either to the individual designated below or to an individual at such address having apparent authorityto accept deliveries on behalf of the addressee. Notice of change of address will also be governed by this section. In the event of ageneral discontinuance of postal service due to strike, lock-out or otherwise, notices or other communications will be delivered byhand or sent by facsimile or other means of electronic communication and will be deemed to have been received in accordance withthis section. Notices and other communications will be addressed as follows:5.5.1 if to Brookfield:Brookfield Asset Management Inc.Brookfield Place, 181 Bay StreetSuite 300, P.O. Box 762Toronto, OntarioM5J 2T3Attention: Vice President, Legal Affairs5.5.2 if to the Property General Partner:Brookfield Property General Partner Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary5.5.3 if to BPY:Brookfield Property Partners Limited73 Front StreetHamilton HM 12BermudaAttention: Secretary-10 -

or to such other addresses as a party may from time to time notify the others in accordance with this Section 5.5.5.6 Further AssurancesEach of the parties hereto will promptly do, make, execute or deliver, or cause to be done, made, executed or delivered, allsuch further acts, documents and things as the other party hereto may reasonably require from time to time for the purpose of givingeffect to this Agreement and will use reasonable efforts and take all such steps as may be reasonably within its power to implement totheir full extent the provisions of this Agreement.5.7 CounterpartsThis Agreement may be signed in counterparts and each of such counterparts will constitute an original document and suchcounterparts, taken together, will constitute one and the same instrument.[NEXT PAGE IS SIGNATURE PAGE]-11 -

IN WITNESS WHEREOF the parties have executed this Agreement as of the day and year first above written.BROOKFIELD ASSET MANAGEMENT INC.By:Name:Title:BROOKFIELD PROPERTY PARTNERS L.P.,by its general partner, BROOKFIELD PROPERTYPARTNERS LIMITEDBy:Name:Title:BROOKFIELD PROPERTY GENERALPARTNER LIMITEDBy:Name:Title:

Exhibit 15.1Consent of Independent Registered Chartered AccountantsWe consent to the use in this Amendment No. 1 to Registration Statement No. 001-35505 of Brookfield Property Partners L.P. onForm 20-F of (1) our report dated April 9, 2012 relating to the carve-out financial statements and financial statement schedule of theCommercial Property Operations of Brookfield Asset Management Inc. as at December 31, 2011 and December 31, 2010 and foreach of the years in the three-year period ended December 31, 2011, (2) our report dated June 11, 2012 relating to the balance sheetof Brookfield Property Partners Limited as at May 31, 2012, (3) our report dated June 11, 2012 relating to the balance sheetof Brookfield Property Partners L.P. as at May 31, 2012, and (4) our report dated April 9, 2010, except as to Note 8 for the year endedDecember 31, 2009 for which the date is March 29, 2012, relating to the consolidated statements of operations, comprehensiveincome and cash flows of TRZ Holdings LLC and Subsidiaries for the year ended December 31, 2009, appearing in this RegistrationStatement.We also consent to the reference to us under the heading “Statement By Experts” in such Registration Statement./s/ Deloitte & Touche LLPIndependent Registered Chartered AccountantsLicensed Public AccountantsToronto, CanadaJune 12, 2012